1 Go to the Federal Reserve website, http://www.federalreserve.gov. Go to “Economic Research and Data,” and access “Consumer Credit.” Find interest rates charged by commercial banks on new automobile loans, personal loans, and credit card plans.
Compare the current or recent level of interest rates among the three types of loans.
Compare trends in the cost of consumer credit provided by commercial banks over the past three years.
Problems
2 Find the future value of $10,000 invested now after five years if the annual interest rate is 8 percent.
What would be the future value if the interest rate is a simple interest rate?
What would be the future value if the interest rate is a compound interest rate?
3 Determine the future values if $5,000 is invested in each of the following situations:
5 percent for ten years