How much interest will be earned over the six years

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Reference no: EM13259131

Katrina Washington is currently employed as a computerprogrammer by Megatel Company. Here dream, however, is to start herown computer software firm. To provide cash to start her ownbusiness in six years she will invest $10,000 today. She thinks theinvestment will earn a 12% annual return.

a. How much would Katrina have in her account at the end ofsix years if she earns 12% on the investment? How much of thiswould be interest earned during the six years?

b. Assume instead, that Katrina has decided she needs $20,000to begin business. She wants to invest equal amounts at the end ofeach year for the next six years to accumulate the $20,000 neededat that time.

i. How much must be invested each year, assuming that it earns12% interest?
ii. How much will the investment be worth at the end of eachof the next six years?
iii. How much will Katrina have put into the account over thesix years?
iiii. How much interest will be earned over the sixyears?

Reference no: EM13259131

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