Exam 4: Introduction to Valuation: The Time Value of Money

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Today,Stacy is investing $18,000 at 6.72 percent,compounded annually,for 5 years.How much additional income could she earn if she had invested this amount at 7.15 percent,compounded annually?

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You just won $30,000 and deposited your winnings into an account that pays 3.9 percent interest,compounded annually.How long will you have to wait until your winnings are worth $75,000?

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Lester had $6,270 in his savings account at the beginning of this year.This amount includes both the $6,000 he originally invested at the beginning of last year plus the $270 he earned in interest last year.This year,Lester earned a total of $282.15 in interest even though the interest rate on the account remained constant.This $282.15 is best described as:

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