Suppose you deposit shs 5,000,000 into an account earning 4 percent interest, compounded monthly. a) How many years will it take for your account to be worth shs7, 500,000? b) Suppose in addition to the initial shs5, 000,000 deposit, you will make monthly contributions of shs50,000. How many years will it take for the account to grow to shs7, 500,000 in this case? than monthly c) How does your answer change if you make quarterly deposits of shs150, 000 rather contributions of shs 50,000? Explain the reason for any difference in your answer from part b. Maintain the assumption that interest compounds monthly.
Suppose you deposit shs 5,000,000 into an account earning 4 percent interest, compounded monthly. a) How many years will it take for your account to be worth shs7, 500,000? b) Suppose in addition to the initial shs5, 000,000 deposit, you will make monthly contributions of shs50,000. How many years will it take for the account to grow to shs7, 500,000 in this case? than monthly c) How does your answer change if you make quarterly deposits of shs150, 000 rather contributions of shs 50,000? Explain the reason for any difference in your answer from part b. Maintain the assumption that interest compounds monthly.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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