Question

Round to the nearest cent

Future value (with changing interest rates). Jose has $7,000 to invest for a 5-year period. He is looking at four different i

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Answer #1

a.

Calculate future value as follows:

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

Future value = $7,000*(1+4.5%)^5

Future value = $8,723.27

____________________________

b.

Calculate future value as follows:

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

Future value = $7,000*(1+8%)^5

Future value = $10,285.30

_________________________

c.

Calculate future value as follows:

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

Future value = $7,000*(1+15%)^5

Future value = $14,079.50

_______________________

d.

Calculate future value as follows:

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

Future value = $7,000*(1+22%)^5

Future value = $18,918.96

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