Question

if you were to receive $10,000 today to invest at 6% interest and for 5 years. but if you receive a $1000 extra at year 1, what would this total be equivalent be in 5 years? (fv)

if interest rate is 6% compounded continuously what would this investment be equivalent in 5 years?

Answer 1

1.The FV will be $14,645, if $1,000 extra at 1 year is received in addition to $10,000

Present value	a	10,000	1,000	11,000
Interest Rate	b	6%	6%
Terms in Years	c	5	4
Compounding Period per Year	d	1	1
FV	FV(b/d,c*d,0,-a)	13,382	1,262	14,645

2.If Compounded continuously FV will be $14,770, if $1,000 extra at 1 year is received in addition to $10,000

Present value	a	10,000	1,000	11,000
Interest Rate	b	6%	6%
Terms in Years	c	5	4
Compounding Period per Year	d	1	1
FV	a*EXP(b*c)	13,499	1,271	14,770