How much do you have after ten years

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Question - You have $10,000 to invest and a five year time horizon.

a) Assuming compound interest, how much additional interest will you earn over the five year period if your investment provides a 5% annual return when compared to a 4.5% annual return?

b) Approximately how long will it take your $10,000 to double in value if it earns 5% per year?

c) If after investing the initial $10,000 for five years you add $2,000 per year at the end of the next five years, how much do you have after ten years? Assume you earn 5% the first five years and 7% the second five years?

d) Ten years from now, your "favorite" brother-in-law learns that you have been saving for the past ten years and requests a loan to finance a sure fire business idea. You agree to loan him your total balance (from part c) for four years and two months charging him a 12% annual interest rate. What are his monthly payments to you?

Reference no: EM132757183

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