Your sister just deposited $12,000 into an investment account. She believes that she will earn an annual return of 10.1 percent for the next 8 years. You believe that you will only be able to earn an annual return of 9.4 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 8 years?
Your sister just deposited $12,000 into an investment account. She believes that she will earn an annual return of 10.1 percent for the next 8 years. You believe that you will only be able to earn an annual return of 9.4 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 8 years?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 14P
Related questions
Question
Your sister just deposited $12,000 into an investment account. She believes that she will earn an annual return of 10.1 percent for the next 8 years. You believe that you will only be able to earn an annual return of 9.4 percent over the same period. How much more must you deposit today in order to have the same amount as your sister in 8 years?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning