Question

if you have invested $700 today, $1000 in two years, $50 in four years, to the nearest dollar, how much will your investment be worth in seven years? assume an 8.4% annual compound return.

Answer 1

To calculate your investment worth in seven years, we have to calculate the sum of future value of each investment in following manner

Investment worth in seven years

= $700 * (1+8.4%) ^7 + $1000 * (1+ 8.4%) ^ (7-2) + $50 * (1+ 8.4%) ^ (7-4)

= $700 * (1.084) ^7 + $1000 * (1.084) ^ (5) + $50 * (1.084) ^ (3)

= $1,231.13 + $1,495.74 + $63.69

= $2,791.56

Your investment worth in seven years will be $2,791.56