Homework help

3. (Related to The Business of Life: Saving for Your First House) (Future value) You are hoping to buy a house in the future and recently received an inheritance of $20,000. You intend to use your inheritance as a down payment on your house. a. If you put your inheritance in an account that earns 7 percent interest compounded annually, how many years will it be before your inheritance grows to $31,000? b. If you let your money grow for 10 years at 7 percent, how much will you have? c. How long will it take your money to grow to $31,000 if you move it into an account that pays 4 percent compounded annually? How long will it take your money to grow to $31,000 if you move it into an account that pays 12 percent? d. What does all this tell you about the relationship among interest rates, time, and future sums? a. If you put your inheritance in an account that earns 7 percent interest compounded annually, how many years will it be before your inheritance grows to $31,000? 6.5 years (Round to one decimal place.) b. If you let your money grow for 10 years at 7 percent, how much will you have? $ (Round to the nearest cent.) c. How long will it take your money to grow to $31,000 if you move it into an account that pays percent compounded annually? years (Round to one decimal place.) How long will it take your money to grow to $31,000 if you move it into an account that pays 12 percent? years (Round to one decimal place.) d. What does all this tell you about the relationship among interest rates, time, and future sums? There is a (1) relationship between both the interest rate used to compound a present sum and the number of years for which the compounding continues and the future value of that sum. (Select from the drop-down menu.) (1) O positive O negative