Question

What is the future value at the end of year 9 of an investment that starts at $3,300 and grows by 8.6% per year for 9 years. ($3,300 is invested at the end of year 1). The interest rate is 10.1% compounded annually

Answer 1

Future value of geometric series = A * [(1+i)^n - (1+g)^n] / (I-g)

Future worth = 3300 * [(1+0.101)^9 - (1+0.086)^9] / (0.101-0.086)

= 3300 * [(1.101)^9 - (1.086)^9] / 0.015

= 3300 * 18.407019

= 60743.16