Calculate the future sum of

$1,000,

given that it will be held in the bank for

9

years at an APR of

8

percent.

b. Recalculate part a using compounding periods that are (1) semiannual and (2) bimonthly (every two months).

c. Recalculate parts a and b for an APR of

16

percent.

d. Recalculate part a using a time horizon of

18

years (the APR is still

8

percent).

e. With respect to the effect of changes in the stated interest rate and holding periods on future sums in parts c and

d,

what conclusions do you draw when you compare these figures with the answers found in parts a and

b?

Question content area bottom

Part 1

a. What is the future sum of

$1,000

in a bank account for

9

years at an APR of

8

percent?