Compute the future value of $1,000 compounded annually for 10 years at 8 percent

Question

Compute the future value of $1,000 compounded annually for 10 years at 8 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the future value of $1,000 compounded annually for 10 years at 11 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Compute the future value of $1,000 compounded annually for 15 years at 8 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

a.

Present Value = $1000. Nper = 10 , Rate = 8%.

Compute the future value using the excel function.

FV =FV(Rate,Nper,Pmt,PV) = FV(8%,10,0,1000) = $2158.92.

Therefore, the future value is $2158.92.

b.

Present Value = $1000. Nper = 10 , Rate = 11%.

Compute the future value using the excel function.

FV =FV(Rate,Nper,Pmt,PV) = FV(11%,10,0,1000) = $2839.42.

Therefore, the future value is $2839.42.

c.

Present Value = $1000. Nper = 15 , Rate = 8%.

Compute the future value using the excel function.

FV =FV(Rate,Nper,Pmt,PV) = FV(8%,15,0,1000) = $3172.17.

Therefore, the future value is $3172.17.

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