Your parents gave you $2,800 for your 16th birthday. You want to deposit it in a
ID: 2821277 • Letter: Y
Question
Your parents gave you $2,800 for your 16th birthday. You want to deposit it in a CD account that is earning 3% annually. Calculate how much your gift will be worth when you graduate from college exactly six years from now using the following methods:
a. Long-hand formula (Do not round intermediate calculations. Round final answer to 2 decimal places.)
Future value:
b. Reference table. Use Table A-1 below. (Round final answer to 2 decimal places.)
Future value:
c. Financial calculator (Round your answer to 2 decimal places.)
Future value:
Future Value Interest Factors (FVIF) FVIF for $1 Compounded at i Percent for n Periods (FV P1x FVIF 14% 1.1000 1.1100 1.0404 1.0609 1.0816 1.1025 11236 1.1449 1.1664 1.1881 .2100 1.2321 1.0303 1.0612 1.0927 1.1249 576 1.1910 .2250 12597 1.2950 1.3310 1.3676 1.1800 1.3924 1.0300 1.1300 1.2769 1.2000 1.4049 1.5609 1.6016 1.1593 1.2167 1.2763 1.3382 .4026 1.4693 1.5386 1.6105 1.6851 1.4185 1.5007 .5869 1.6771 1.7716 1.8704 1.5036 1.6058 17138 1.8280 1.9487 2.0762 1.0829 1.1717 1.2668 1.3686 1.4775 1.5938 17182 18509 1.9926 2.1436 2.3045 1.9990 2.1719 2.3579 2.5580 1.1046 1.2190 1.3439 1.4802 1.6289 1.7908 .9672 2589 2.3674 2.5937 2.8394 1.1157 1.2434 1.3842 15395 1.7103 1.8983 2.1049 2.3316 2.5804 2.8531 3.1518 3.8833 4985 1.1495 1.3195 15126 1.7317 1.9799 2.2609 2.5785 2.9372 3.3417 3.7975 4.3104 1.1610 1.3459 .5580 1.8009 2.0789 2.3966 2.7590 3.1722 3.6425 4.772 4.7846 1.1726 1.3728 1.6047 1.8730 2.1829 2.5404 2.9522 3.4259 3.9703 4.5950 5.3109 1.1843 1.4002 .6528 1.9479 2.920 2.6928 3.1588 3.7000 4.3276 5.0545 5.8951 1.4282 1.7024 2.0258 2.4066 2.8543 3.3799 3.9960 4.7171 5.5599 6.5436 1.4568 1.7535 2.1068 2.5270 3.0256 3.6165 4.3157 5.1417 6.115 7.2633 1.2202 1.4859 18061 2.1911 2.6533 3.2071 3.8697 4.6610 5.6044 6.7275 8.0623 2.1924 2.3864 2.8398 2.4883 2.3131 1.2653 1.3401 1.1487 1.2299 13159 1.4071 2.0820 2.3526 2.6584 2.1950 2.5023 2.8526 2.2107 2.7731 3.4785 3.5832 4.2998 2.8262 3.5115 4.1084 4.8068 5.6240 4.0214 4.4355 5.2338 1.6895 3.7072 4.2262 6.1917 74301 3.8359 4.6524 6.7767 1.1268 1.2682 1.4258 16010 1.7959 2.0122 2.2522 10.6993 9.0075 10.1472 11.4198 12.8392 9.2655 10.5387 11.9737 13.5895 15.4070 9.3576 10.7480 12.3303 14.1290 16.1715 18.4884 9.2765 10.7613 12.4677 14.4265 16.6722 9.2441 22.1861 9.0243 10.5752 12.3755 425 16.8790 19.6733 22.9005 26.6233 8.6128 10.1974 12.0557 14.2318 16.7765 9.7484 23.2144 27.2516 31.9480 9.6463 11.5231 13.7435 16.3665 19.4608 23.1056 27.3930 32.4294 38.3376 3.0658 4.8980 5.4924 6.8858 9.5964 4.8871 6 61304986 7.0757 6.2543 8.1372 6.8660 54.6487 1.6084 1.6406 2251 6252 2.0938 1.2953 2.221 6.6488 8004 722 755 7.4494 22.8923 29.9599 39.1 85.8499 1138 28.2056 6484 3253 56.440 100.6998 8048 1755 18.7284 25.5477 34.7 425 996 72.0685 440.7006 590.6682 34.0039 1448 58.5 1224.8096 750.3783 1051.6675 1469.7716 3.2620 31.4094 45.2593 65.0009 93.0510 132.7816 188.8835 267.8635 533.8687 1.5038 2.522 3.3599 4.9931 7.3920 10.9029 16.0227 23.4625 34.2363 49.7852 72.1510 104.2171 150.0432 215.3272 308.0431 439.3165 624.6264 885.4464 1251.4843 1763.7259 1.5188 2.2972 3.4607 5.1928 7.7616 11.5570 17.1443 25.3395 37.3175 54.7637 80.0876 1.5340 2.3432 3.5645 5.4005 8.1497 12.2505 18.3444 27.3666 40.6761 60.2401 88.8972 130.7299 191.5901 279.8392 407.3870 591.1443 855.0511 1232.8956 1772.2270 2539.7653 1.549 1.5648 2.4 509.6072 730.81 1044.8268 1489.2664 2116.4 70 66.2641 468.4950 000.4098 9204 48.3273 72.8 244.641 2509.6506 986.4842 2.4866 4609 2025.687 88.1975 134.9522 205.7 106 62.5852 1874.6550 2820.5665 68.2179 106.7190 166.2746 909 184.5648 038 2566.21Explanation / Answer
Answer to Part a.
Present Value = $2,800
Rate (r) = 3%
Time (n) = 6 years
Future Value = Present Value * (1 + r) ^n
Future Value = $2,800 * (1 + 0.03)^ 6
Future Value = $2,800 * 1.03^ 6
Future Value = $2,800 * 1.1941
Future Value = $3,343.48
Answer to Part b.
Future Value = Present Value * FV of $1 (r%, n)
Future Value = $2,800 * FV of $1 (3%, 6)
Future Value = $2,800 * 1.1941
Future Value = $3,343.48
Answer to Part c.
I = 3%
N = 6
PV = -$2,800
PMT = 0
FV = $3,343.48
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