Question

If you invest $1,000 per period for the following number of periods, how much would you have at the end? a. 10 years at 10 percent. b. 20 years at 9 percent.

Answer 1

a

Future value = present value*(1+ rate)^time

Future value = 1000*(1+0.1)^10

Future value = 2593.74

Using Calculator: press buttons "2ND"+"FV" then assign

PV =-1000

I/Y =10

N =10

PMT = 0

CPT FV

Using Excel

=FV(rate,nper,pmt,pv,type)

=FV(0.1,10,,-1000,)

b

Future value = present value*(1+ rate)^time

Future value = 1000*(1+0.09)^20

Future value = 5604.41

Using Calculator: press buttons "2ND"+"FV" then assign

PV =-1000

I/Y =9

N =20

PMT = 0

CPT FV

Using Excel

=FV(rate,nper,pmt,pv,type)

=FV(0.09,20,,-1000,)