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TRUE or FALSE An investment today of $8,424 at 6% will yield $2,000 per year for the next five years because interest is being earned

TRUE or FALSE

An investment today of $8,424 at 6% will yield $2,000 per year for the next five years because interest is being earned on principal that is left invested each year. The following tables are available:

Present value of $1:

4%

5%

6%

7%

8%

5

0.822

0.784

0.747

0.713

0.681

6

0.790

0.746

0.705

0.666

0.630

7

0.760

0.711

0.665

0.623

0.583

8

0.731

0.677

0.627

0.582

0.540

9

0.703

0.645

0.592

0.544

0.500

10

0.676

0.614

0.558

0.508

0.463

Present value of ordinary annuity of $1:

4%

5%

6%

7%

8%

5

4.452

4.329

4.212

4.100

3.993

6

5.242

5.076

4.917

4.767

4.623

7

6.002

5.786

5.582

5.389

5.206

8

6.733

6.463

6.210

5.971

5.747

9

7.435

7.108

6.802

6.515

6.247

10

8.111

7.722

7.360

7.024

6.710

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