4. Determining the Time Value of Money. Using Exhibit 13-1 , complete the following table. Then answer
Question:
4. Determining the Time Value of Money. Using Exhibit 13-1 , complete the following table. Then answer the questions that follow the table. Hint: To calculate the total amount of interest or earnings, subtract the amount of your total investment from the value at the end of the time period. (Obj. 1)
Annual Deposit Rate of Return Number of Years Investment Value at the End of Time Period Total Amount of Investment Total Amount of Interest or Earnings
$2,000 5% 10
$2,000 9% 10
$2,000 5% 20
$2,000 9% 20
a. In the above situations, describe the effect that the rate of return has on the investment value at the end of the selected time period.
b. In the above situations, describe the effect that the number of years has on the investment value at the end of the selected time period.
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