3. Which of the following choices will re- sult in a greater future value at age sixty-five? Choice 1 is to invest $3,000 per year from ages twenty through twenty-six (a total of seven invest- ments) into an account and then leave it untouched until you are sixty-five years old, which is another forty years. Choice 2 is to begin at age twenty- seven and make $3,000 deposits into an investment account every year until you are sixty-five years old (a total of thirty-nine investments). Each account earns an average of 10% per year.

3. Which of the following choices will re- sult in a greater future value at age sixty-five? Choice 1 is to invest $3,000 per year from ages twenty through twenty-six (a total of seven invest- ments) into an account and then leave it untouched until you are sixty-five years old, which is another forty years. Choice 2 is to begin at age twenty- seven and make $3,000 deposits into an investment account every year until you are sixty-five years old (a total of thirty-nine investments). Each account earns an average of 10% per year.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EB: You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how...

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