Problem
Samuel Cunard has $1,000 (non-income) he wants to save to start the Halifax Steamboat Company. For questions a to c, assume no inflation.
1a. If he puts it into a savings account in which he earns 5% per year, how much will he earn if he keeps the money in the savings account for 5 years.
1b. If the annual tax rate is 40%, how much would he earn?
1c. How long would you have to keep the money in the account to obtain $1,500 assuming a 5% nominal return and no tax? How about if there is a 40% tax?
1d. How would your answers to a) and b) change if in ation was 3%?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.