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Chapter 4: Question (page 281)
You invest $3,000 for three years at 12 percent.
c. What is the value of your investment after three years?
Answer
The value of investment after three years is $4,214.78.
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You invest \(3,000 for three years at 12 percent.Combine these steps using the formula FV 5 PV 3 (1 1 i) n to find the future value of \)3,000 in 3 years at 12 percent interest.
The Clearinghouse Sweepstakes has just informed you that you have won \(1 million. The amount is to be paid out at the rate of \)20,000 a year for the next 50 years. With a discount rate of 10 percent, what is the present value of your winnings?
Question: Beverly Hills started a paper route on January 1. Every three months, she deposits $550 in her bank account, which earns 8 percent annually but is compounded quarterly. Four years later, she used the entire balance in her bank account to invest in an investment at 7 percent annually. How much will she have after three more years?
How much would you have to invest today to receive c. $6,000 each year for 10 years at 9 percent?
How much would you have to invest today to receive b. $20,000 in 12 years at 13 percent?
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