Problem 1. If you deposited $250 in your savings account today, and the bank pays 4 percent interest per year, how much would you have in your savings account after 9 years?
- Recalculate the account balance using a 6 percent interest rate and a 7 percent interest rate.
Problem 2. A $450 deposit earns 6 percent interest in the first year, 3 percent interest in the second year, and 7 percent interest in the third year. What is the future value at the end of the third year?
Problem 3. What is the annual rate of return for an $8,000 investment if in five years it grows to $12,500?
- Assuming the growth occurred in six years and then eight years, recalculate the rate of return for these two scenarios.