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# 5-5 Time Value: You have \$1,500 to invest today at 7% interest compounded annually.

5-5 Time Value:

You have \$1,500 to invest today at 7% interest compounded annually.

a. Find how much you will have accumulated in the account at the end of (1) 3 years, (2) 6 years, and (3) 9 years.

b. Use your findings in part a to calculate the amount of interest earned in (1) the first 3 years (years 1 to 3), (2) the second 3 years (years 4 to 6), and (3) the third 3 years (years 7 to 9).

c. Compare and contrast your findings in part b. Explain why the amount of interest earned increases in each succeeding 3-year period.

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