1. Solve each problem involving a single payment investment that earns compound interest. a) $8 000 was invested for 6 years at 5%, compounded annually. What was the investment worth at its maturity? b) An investment earned 3% interest, compounded monthly, for 7 years. At its maturity, the investment was worth $10 000. What amount was invested? c) $3500 was invested for 5 years at an interest rate that was compounded monthly. At its maturity, the investment was worth $4600. What was the annual interest rate?
1. Solve each problem involving a single payment investment that earns compound interest. a) $8 000 was invested for 6 years at 5%, compounded annually. What was the investment worth at its maturity? b) An investment earned 3% interest, compounded monthly, for 7 years. At its maturity, the investment was worth $10 000. What amount was invested? c) $3500 was invested for 5 years at an interest rate that was compounded monthly. At its maturity, the investment was worth $4600. What was the annual interest rate?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 18E
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Transcribed Image Text:1. Solve each problem involving a single payment investment that earns
compound interest.
SHETHE
a) $8 000 was invested for 6 years at 5%, compounded annually. What was
the investment worth at its maturity?
b) An investment earned 3% interest, compounded monthly, for 7 years. At
its maturity, the investment was worth $10 000. What amount was
invested?
c) $3500 was invested for 5 years at an interest rate that was compounded
monthly. At its maturity, the investment was worth $4600. What was the
annual interest rate?
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