Suppose that a savings account attracts an interest rate of 1.6% per annum. How much would need to be deposited into the account now in order to have $5,000 in 8 years if the interest is compounded: (a) Quarterly? (4 times per year) (b) Continuously? Give your answers rounded to two decimal places.

Suppose that a savings account attracts an interest rate of 1.6% per annum. How much would need to be deposited into the account now in order to have $5,000 in 8 years if the interest is compounded: (a) Quarterly? (4 times per year) (b) Continuously? Give your answers rounded to two decimal places.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Suppose that a savings account attracts an interest rate of 1.6% per
annum. How much would need to be deposited into the account now
in order to have $5,000 in 8 years if the interest is compounded:
(a) Quarterly? (4 times per year)
(b) Continuously?
Give your answers rounded to two decimal places.

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