How long will to wait if do not add any additional money

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Question 1: If you could invest the money at 8%, would you have to invest more or less? How much?

Question 2: Suppose you are offered the following investment choices:

  1. You can invest $500 today and receive $600 in 5 years. The investment is considered low risk.
  2. You can invest the $500 in a bank account paying 4%.

Question 3: What is the implied interest rate for the first choice and which investment should you choose?

Question 4: Suppose you want to buy some new furniture for your family room. You currently have $500 and the furniture you want costs $600. If you can earn 6%, how long will you have to wait if you don't add any additional money?

Reference no: EM132605248

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