hello 47



Complete the problems using and Excel spreadsheet.


  1. What is the amount of interest earned on $5,000 for four years at 7% simple interest per year?


  1. You deposit $4,000 in a savings account that earns 6% simple interest per year. How many years will it take to double your balance? If, instead, you deposit the $4,000 in another savings account that earns 5% compounded yearly, how many years will it take to double your balance?


  1. Suppose you have the option of receiving either $6,000 at the end of four years or P dollars today. Currently, you have no need for the money, so you could deposit the P dollars into a bank account that pays 5% interest compounded annually. What value of P would make you indifferent in your choice between P dollars today and the promise of $6,000 at the end of four years?


  1. Which of the following alternatives would you choose, assuming an interest rate of 9% compounded annually?


    1. Receive $150 today.
    2. Receive $200 three years from now.
    3. Receive $250 six years from now.


  1. State the amount accumulated by a present investment of $5,000 in six years at 7% compounded annually.


  1. State the present worth of the future payment of $6,000 seven years from now at 8% compounded annually.