1. Mastery Problem: Time Value of Money

   Time value of money

   Simple interest Ringer Co., a company that you regularly do business with, gives you a $13,000 note. The note is due in three years and pays simple interest of 9% annually. How much will Ringer pay you at the end of that term? Note: Enter the interest rate as a decimal. (i.e. 15% would be entered as .15)

   Principal	+	( Principal	x	Rate	x	Time		)	=	Total
   $________	+	($________	x	________	x	________	years	)	=	$________

   Imagine that Ringer Co., fearing that you wouldnt take its deal, decides instead to offer you compound interest on the same $13,000 note. How much will Ringer pay you at the end of three years if interest is compounded annually at a rate of 9%? If required, round your answers to the nearest cent.

   	Principal	Annual Amount of	Accumulated Amount at
   	Amount at	Interest (Principal at	End of Year (Principal at
   	Beginning of	Beginning of Year x	Beginning of Year + Annual
   Year	Year	9%)	Amount of Interest)
   1	$13,000	$1,170	$14,170
   2	$14,170	$________	$________
   3	$________	$________	$________