Question
You are hoping to buy a house in the future and recently received an inheritance of $ 22,000 . You intend to use your inheritance
You are hoping to buy a house in the future and recently received an inheritance of
$22,000. 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
10.25 years at 77 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
33 percent compounded annually? How long will it take your money to grow to
$31,000 if you move it into an account that pays
11percent?
d.What does all this tell you about the relationship among interest rates, time, and future sums?
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