Value

You receive a bonus of 3,000

a. Calculate the future value of 3,000 given that it will be held in the bank for 6 years and earn anĀ annual interest rateĀ of 7%

b. Recalculate part (A) using a compounding period that is (1) semiannual and (2) bimonthly.

c. Recalculate parts (a) and (b) using an annual interest rate of 14%.

d. Recalculate part (a) using a time horizon of 12 years at an annual interest of 7%.

e. What conclusions can you draw when you compare the answers in parts (c) and (d) with the answers in parts (a) and (b)