Homework answers / question archive / You just received a bonus of ?$3,000

You just received a bonus of ?$3,000

Accounting

Share With

You just received a bonus of ?$3,000.

a)  Calculate the future value of ?$3,000?, given that it will be held in the bank for 8 years and earn an annual interest rate of 7 percent.

b)  Recalculate part ?(a?) using a compounding period that is? (1) semiannual and? (2) bimonthly.

c)  Recalculate parts ?(a?) and ?(b?) using an annual interest rate of 14 percent.

d)  Recalculate part ?(a?) using a time horizon of 16 years at an annual interest rate of 7 percent.

e)  What conclusions can you draw when you compare the answers in parts ?(c?) and ?(d?) with the answers in parts ?(a?) and ?(b?)?