You invest a single amount of $16,850 for 7 years at 15 percent. At the end of 7

Question

You invest a single amount of $16,850 for 7 years at 15 percent. At the end of 7 years you take the proceeds and invest them for 14 years at 17 percent.

How much will you have after 21 years? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

How much will you have after 21 years? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Explanation / Answer

Future value of $16850 after 7 years

FV = 16850(1+0.15)7

FV = 16850 * 2.6600198805

FV = $44821.334986 or $44821.33

Now, these amount is invested further for 14 years,

FV = $44821.33(1+0.17)14

FV = 44821.33 * 9.0074542390

FV = $403726.07892 or $403726.08

Therefore after 21 years we will have $403726.08

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