# hello 47

Assignment:

Complete the problems using and Excel spreadsheet.

1. What is the amount of interest earned on \$5,000 for four years at 7% simple interest per year?

1. You deposit \$4,000 in a savings account that earns 6% simple interest per year. How many years will it take to double your balance? If, instead, you deposit the \$4,000 in another savings account that earns 5% compounded yearly, how many years will it take to double your balance?

1. Suppose you have the option of receiving either \$6,000 at the end of four years or P dollars today. Currently, you have no need for the money, so you could deposit the P dollars into a bank account that pays 5% interest compounded annually. What value of P would make you indifferent in your choice between P dollars today and the promise of \$6,000 at the end of four years?

1. Which of the following alternatives would you choose, assuming an interest rate of 9% compounded annually?

2. Receive \$200 three years from now.
3. Receive \$250 six years from now.

1. State the amount accumulated by a present investment of \$5,000 in six years at 7% compounded annually.

1. State the present worth of the future payment of \$6,000 seven years from now at 8% compounded annually. 