Your grandmother just gave you $6000. You would like to see what it might grow to if you invest it.

(a) Calculate the future value of $6000, given that it will be invested for five years at an annual interest rate of 6%.

(b) Recalculate part (a) using a compounding period that is (i) semi-annual and (ii) bi-monthly (every two months).

(c) Now consider what might happen if you can invest the money at a 12% rate rather than 6% rate; recalculate parts (a) and (b) for a 12% annual interest rate.

(d) Now consider what might happen if you invest the money for 12 years rather than five years; recalculate part (a) using a time horizon of 12 years (annual interest rate is still 6%).

(e) With respect to the changes in the stated interest rate and length of time the money is invested in parts (c) and (d), what conclusions can you draw?