If you invest $16,000 today, how mu Ch will you have: Use Appendix A as an appro

Question

If you invest $16,000 today, how mu Ch will you have: Use Appendix A as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. In 9 years at 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) b. In 20 years at 11 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) c. In 18 years at 14 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) d. In 10 years at 14 percent (compounded semiannually)? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Explanation / Answer

Part A

We have :

PV= 16,000

N= 9

R= 8%

We can use following formula to compute FV:

FV = PV x (1+r)^n

      = 16,000 x (1+0.08) ^9

      = 16,000 x 1.999005

      = 31,984.07

Part B

We have :

PV= 16,000

N= 20

R= 11%

We can use following formula to compute FV:

FV = PV x (1+r)^n

      = 16,000 x (1+0.11) ^20

      = 16,000 x 8.0623115

      = 128,996.98

Part C

We have :

PV= 16,000

N= 18

R= 14%

We can use following formula to compute FV:

FV = PV x (1+r)^n

      = 16,000 x (1+0.14) ^18

      = 16,000 x 10.575169

      = 169,202.71

Part D

We have :

PV= 16,000

N= 10 x2 = 20

R= 14%/2 = 7%

We can use following formula to compute FV:

FV = PV x (1+r)^n

      = 16,000 x (1+0.07) ^20

      = 16,000 x 3.8696845

      = 61,914.95

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