Question

4-1If Samantha invests $700 today in an account that pays 4 percent interest compounded annu- ally, how much will she have in her account four years from today?

4–2 Fifteen (15) years ago, your parents purchased an investment for $2,500. If the investment earned 6 percent interest each year, how much is it worth today?

4–3 Fiona plans to invest $500 later today. She wants to know to what amount her investment will grow in 20 years if she earns 12 percent interest com- pounded (a) annually, (b) quarterly, and (c) monthly.

4–4 Staci invested $950 five years ago. Her invest- ment paid 7.2 percent interest compounded monthly. Staci’s twin sister Shelli invested $900 at the same time. But Shelli’s investment earned 8 percent interest compounded quarterly. How much is each investment worth today?

Answer 1

Future Value Present value interest rate no.of years 4-1 FV PV*(1+i)an 700*(1+0.04)^4 S 818.90