Beverly Hills started a paper route on January 1, 2004. Every three months, she
ID: 2704120 • Letter: B
Question
Beverly Hills started a paper route on January 1, 2004. Every three months, she deposits $400 in her bank account, which earns 8 percent annually but is compounded quarterly. On December 31, 2007, she used the entire balance in her bank account to invest in an investment at 12 percent annually.
How much will she have on December 31, 2010? Use Appendix A and Appendix C. (Round "FV Factor" to 3 decimal places and final answer to 2 decimal places. Omit the "$" sign in your response.)
Beverly Hills started a paper route on January 1, 2004. Every three months, she deposits $400 in her bank account, which earns 8 percent annually but is compounded quarterly. On December 31, 2007, she used the entire balance in her bank account to invest in an investment at 12 percent annually.
Beverly Hills started a paper route on January 1, 2004. Every three months, she deposits $400 in her bank account, which earns 8 percent annually but is compounded quarterly. On December 31, 2007, she used the entire balance in her bank account to invest in an investment at 12 percent annually. How much will she have on December 31, 2010? Use Appendix A and Appendix C. (Round "FV Factor" to 3 decimal places and final answer to 2 decimal places. Omit the "$" sign in your response.)Explanation / Answer
Hi,
Please find the answer as follows:
Future Value of an Annuity = Amount*FVIFA(2%,16)
FVA = 400*18.639 = 7455.60 (value after 4 Years)
Future Value = Present Value*FVIF (12%,3Years)
FV = 7455.60*1.405 = 10475.12
Answer is 10475.12
Thanks.
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