PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk

Exercise 4

If you put $6,000 in a savings account that pays interest at the rate of 4 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put $6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?