Rachael invests $8000 for 7 years and 8 months. The account earns 12% semiannually. A) What is n for the compound interest part? B) What is the future value after the compound interest part? C) Simple interest is used for how many months?
Rachael invests $8000 for 7 years and 8 months. The account earns 12% semiannually. A) What is n for the compound interest part? B) What is the future value after the compound interest part? C) Simple interest is used for how many months?
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 6E
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Question
Rachael invests $8000 for 7 years and 8 months. The account earns 12% semiannually.
A) What is n for the compound interest part?
B) What is the
C) Simple interest is used for how many months?
D) Assuming simple interest for the partial period, how much money does Rachael have in the account at the end of 7 years and 8 months?
Expert Solution
Step 1
Future value of present sum depends on whether it is simple interest or compounded interest.Depending upon simple interest or compounding period is calculated.
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