You invest $1,000 today and expect to sell your investment for $2,000 in 10 years. (lo5-1) a. is this a good deal if the interest rate is 6%? b. what if the interest rate is 10%?

If the interest rate is 6%,then selling the investment for $2,000 is a good deal.

If the interest rate is 10%, then selling the investment for $2,000 is a bad deal.

Explanation:

If  the interest rate is 6% then compounded yearly for 10 years 1,000 should have a future value of

1000*1.06^10=1,790

SO if the interest rate is 6% then in 10 years the investment should have a future value of 1,790  and selling it for $2,000 is a very good deal as you are making more than 6% per year which is the interest rate.

Now if the interest rate is 10% the future value will be

1,000*1.1^10=2593

Now the future value is more than 2,000 which means that we will be earning less than the interest rate, which means it is a bad deal.

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!

answer; competency based pay;