Problems eLab Compound Interest ancelab.com ercises online 1. (Related to Checkpoint 2) (Future value) To what amount will the following invest- tant feedback ments accumulate? a. $5,000 invested for 10 years at 10 percent compounded annually b. $8,000 invested for 7 years at 8 percent compounded annually c. $775 invested for 12 years at 12 percent compounded annually d. $21,000 invested for 5 years at 5 percent compounded annually (Related to Checkpoint 2) (Future value) Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual compound interest o 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the 2. bank for 1, 5, and 15 years b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part (a) using 8 percent and 10 percent. c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you just did? (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 a 7 percent interest rate 3. compounded annually, how many years will it be before your inheritance grows to $30,000? b. If you let your money grow for 10.25 years at 7 percent, how much will you have? c. How long will it take your money to grow to $30,000 if you move it into an account that pays 3 percent compounded annually? How long will it take your money to grow to $30,000 if you move it into an account that pays 11 percent? d. What does all of this tell you about the relationship among interest rates, time, and future sums 4. (Related to Checkpoint 2) (Future value) Bob Terwilliger received $12,345 for his services as financial consultant to the mayor's office of his hometown of Springfield. Bob says that his consulting work was his civic duty and that he should not receive any compensation. So, he has invested his paycheck into an account paying 3.98 percent annual interest and left the account in his will to the city o Springfield on the condition that the city could not collect any money from 767