You have been saving for a vacation property and currently have $15,000 towards a down payment. With increasing real estate prices, you feel you will need $20,000 for the down payment.

a) If you put your savings in an account that earns 6% interest, compounded annually, how many years will it take before your savings grows to $20,000?

b) How long will it take your money to grow to $20,000 if you earn only 4% compounded annually?

c) How long will it take for your money to grow to $20,000 if you earn 12% compounded annually?

d) What does this tell you about the relationship between:

I. interest rates & time?

II. time & future values?

III. interest rates & future values?