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Juan Garza invested $108,000 10 years ago at 8 percent, compounded quarterly. How much has he...

Juan Garza invested $108,000 10 years ago at 8 percent, compounded quarterly. How much has he accumulated? Use Appendix A for an approximate answer but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

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Answer #1

Answer :-

Present value (PV) = $108,000

The Investment is compounded quarterly that a reason we multiply the year by 4 and Interest rates is divided by 4.

Time (n) = 10 years × 4 =40

Interest rate (r) = 8% ÷ 4 = 2%

Future value (FV) = PV (1 + r)n

Or FV = PV × FV factor (2%,40)

FV factor (2%, 40) = 2.20804

FV = $108,000 × 2.20804

FV = $238,468.32

He Accumulated $238,468.32.

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