If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why

Question

PA3. LO 11.3Use the tables in Appendix B to answer the following questions.

If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account?

If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate?

You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years?

You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?

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