Question
1) You just received a bonus of $5000. A) Calculate the future value of $5000 given that it will be held in the bank for
1) You just received a bonus of $5000.
A) Calculate the future value of $5000 given that it will be held in the bank for five years and earn an annual interest rate of 6 percent.
B) Recalculate part (a) using a compounding period that is (1) semiannual and (2) bimonthly.
C) Recalculate parts (a) and (b) using a 12 percent annual interest rate.
D) Recalculate part (a) using a time horizon of 12 years at a 6 percent interest rate.
E) Whatconclusionscanyoudrawwhenyoucompareanswersinparts(c)and(d)withtheanswersinparts(a)and(b)?
2) A new finance book sold $15,000 copies following the first year of its release and was expected to increase by 20 percent per year. What sales are expected in years 2, 3 and 4? Graph this sales trend and explain.
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