to what amount will the following investmentsaccumulate? a) 5,000. invested for
ID: 2662566 • Letter: T
Question
to what amount will the following investmentsaccumulate? a) 5,000. invested for 10 yrs at 10% compoundedannually. b) 8,000. invested for 7 yrs at 8% compounded annually. c) 775. invested for 12 yrs at 12% compounded annually. d) 21,000. invested for 5 yrs at 5% compounded annuall. to what amount will the following investmentsaccumulate? a) 5,000. invested for 10 yrs at 10% compoundedannually. b) 8,000. invested for 7 yrs at 8% compounded annually. c) 775. invested for 12 yrs at 12% compounded annually. d) 21,000. invested for 5 yrs at 5% compounded annuall.Explanation / Answer
a) Present value (PV) = 5000;Number of years(n) = 10; Interest rate =10%
The formuls for calculating the Future value (FV)
FV = PV( 1+ i)n
Put the values in the above formula, we get
FV = 5000(1+0.1)10 = 5000(1.1)10 = 12,965
b) FV = 8000(1+0.08)7 =8000(1.713) = 13,704
c) FV = 775(1+0.12)12 =775(1.12)12 = 775(3.896) = 3019.4
d) FV= 21,000(1+0.05)5 =21,000(1.05)5 = 21,000(1.276) = 26,796
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