Essay
This problem demonstrates the dependence of the future value of an annuity on the interest rate. Suppose $1,000 is invested at the end of each year for 20 years. Calculate the future value if the investments earn an annually compounded rate of return of:
a) 5% b) 6% c) 7% d) 8%
Note that the future value increases proportionately more than the interest rate.
Correct Answer:
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a) $33,065.95; b) $3...View Answer
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