What is the value of your investment after three years? Multiply your answer to

Question

   

  

  

What is the value of your investment after three years? Multiply your answer to part b by 1.08. This gives your final answer. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

  

  

Calculate the future value by going to Appendix A (future value of $1), and looking up the future value for n = 3, and i = 8 percent. Multiply this tabular value by $2,500 and compare your answer to the answer in part c. There may be a slight difference due to rounding. (Round "FV Factor" to 3 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.)

  

You invest $2,500 for three years at 8 percent.

Explanation / Answer

Ans

Computation 1 Investment Value Y0 2,500.00 Future Value Factor for 1 Year           1.08 Future Value of Investment 2,700.00 Value of investment at Y1 2700 Future Value Factor           1.08 Value of investment at Y2 2,916.00 Value of investment at Y2 2916 Future Value Factor           1.08 Value of investment at Y2 3,149.28 Computation 2 Investment Value Y0 2,500.00 Cumulative Future Value factor for 3 Years 1.26 Value of investment at Y3 3,150.00 Difference           0.72 Difference is due to rounding off

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