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Future value business of life

Price: $1.99


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 7% interest rate 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%, 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% compounded annually? How long will it take your money to grow to
$30,000 if you move it into an account that pays 11%?
d. What does all this tell you about the relationship among interest rates, time, and
future sums?

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