1)earn 8 percent interest per year, compounded annually. You will not withdraw any principal orinterest until you retire in 48 years. Which one of the following statements is correct?Assume you deposited $6,000 into a retirement savings account today. The account willA) The interest you carn in Year 7 will equal the interest you earn in Year 14.B) The interest amount you earn will double in value every year.C) The total amount of interest you will earn will equal $6,000 x .08 x 48.D) The present value of this investment is equal to $6,000.E) The future value of this amount is equal to $6,000 x (1 + 48)".

Initial Deposit = 6000 Interest Rate = 8% Annual Compounding Time Period (N) = 48 years

Answered: 1) Assume you deposited $6,000 into a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
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