If you invest $14,000 today, how much will you have in each of the following ins
ID: 2611698 • Letter: I
Question
If you invest $14,000 today, how much will you have in each of the following instances? Use Appendix A as an approximate answer, but calculate your final answer using the formula and financial calculator methods.
a. In 10 years at 11 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
b. In 20 years at 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
c. In 20 years at 6 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
d. In 10 years at 6 percent (compounded semiannually)? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Explanation / Answer
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
1.
A=$14000*(1.11)^10
=$14000*2.839420986
which is equal to
=$39751.89
2.
A=$14000(1.09)^20
=$14000*5.604410768
which is equal to
=$78461.75
3.
A=$14000(1.06)^20
=$14000*3.207135472
=$44899.90
4.
We use the formula:
A=P(1+r/200)^2n
where
A=future value
P=present value
r=rate of interest
n=time period.
A=$14000(1+6/200)^(2*10)
=$14000*1.806111235
which is equal to
=$25285.56(Approx).
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.