1. Find the future value one year from now of a $7,000 investment at a 3% annual
ID: 2686337 • Letter: 1
Question
1. Find the future value one year from now of a $7,000 investment at a 3% annual compound interest rate. Also calculate the future value if the investment is made for 2 years. 2. Find the future value of $10,000 investment now after five years of the annual interest rate is 8% a. What would be the future value if the interest rate is a simple interest rate b. What would be the future value if the interest rate is a compound interest rate 3. Determine the future value if $5,000 is invested in each of the following situation:( just need to answer one in a,b,c. thank you ) a. 5% for 10 years b. 7% for 7 years c. 9% for 4 years 4. You are planning to invest $2,500 today for 3 years at a nominal interest rate of 9% with annual compounding a. What would be the future value of your investment b. Now assume that inflation is expected to be 3% / years, over the same 3 years period. What would be the investmentExplanation / Answer
1) The future...it...be worth at...The future value...will...worth...after co...many ...
= P*(1 +...value...of the investment...value (P)...1...plus the rate...= 7000...1+3/100)^1
=$426 ... Ans
2)(8/100)^5 = 693
a) (1000 x 8 x 5) = 10400.
b)...same as above ...if ...is invested...ituations: a....7% for seven years...years = $ 7058 ...to invest...for three...nominal...rate of 9%...nding.
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