Suppose you currently have $2,000 and plan to purchase a 3-year certificate of deposit (CD) that pays

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Suppose you currently have $2,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 4% interest compounded annually. How much will you have when the CD matures? How would your answer change if the interest rate were 5% or 6% or 20%? ($2,249.73, $2,315.25, $2,382.03, $3,456.00. Hint: With a calculator, enter N = 3, I/YR 5 4, PV = 22000, and PMT = 0; then press FV to get 2,249.73. Enter I /YR = 5 to override the 4%, and press FV again to get the second answer. In general, you can change one input at a time to see how the output changes.)

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Fundamentals Of Financial Management

ISBN: 9780357517574

16th Edition

Authors: Eugene F. Brigham, Joel F. Houston

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