You invest $2.800 for three years at 9 percent What is the value of your investm

Question

You invest $2.800 for three years at 9 percent What is the value of your investment after one year? Multiply $2.800 x 1 09 What is the value of your investment after two years'? Multiply your answer to part a by 1 09 (Round your answer to 2 decimal places.) What is the value of your investment after three years'? Multiply your answer to part 6 by 1 09 This gives your final answer (Round your answer to 2 decimal places.) Confirm that your final answer is correct by going to Appendix A (future value of $1). and looking up the future value for n = 3 and i = 9 percent Multiply this tabular value by $2,800 and compare your answer to the answer in part c There may be a slight difference due to rounding (Enter the answer computed using the Appendix table factor.)

Explanation / Answer

(a) Present Value          2,800 Interest Rate 9% Value of Investment After 1 year 2800*1.09    3,052 (b) Value of Investment After 1 year          3,052 Value of Investment After 2 year 3052*1.09    3,326.68 ( c) Value of Investment After 2 year    3,326.68 Value of Investment After 3 year 3326.68*1.09    3,626.08 (d) Present Value          2,800 Interest Rate 9% Period (years) 3 Future Value = 2800*(FVIF 9%,3 years) Future Value = 2800*1.295          3,626

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