Question

Time value Personal Finance Problem You can deposit $10,000 into an account paying 6% annual interest either today or exactly 5 years from today. How much better off will you be 40 years from now if you decide to make the initial deposit today rather than 5 years from today? The future value at the end of 40 years if you deposit $10,000 at 6% today is (Round to the nearest dollar) The future value at the end of 40 years if you deposit $10,000 at 6% 5 years from today is $ (Round to the nearest dollar) If you invest the $10,000 now instead of waiting for 5 years to make the investment, you would be better off by (Round to the nearest dollar)

Answer 1

The answers are as follows:

Please note that we can solve these questions TO using Financial Calculator CMPD Compound Inti n = Number of periods. Il = Interest per period PV = Present Value fV= future Value Now, The future value at the end of 40 years if you deposit $ 10000 at 6% today is 1 UL MUUTO CMPD Set: Not Applicable n=40 I'/. 26 PV = - 10000 PMT=0 fV. SOLVE 102857. 1794

The future value at the end of 40 years if you deposit $10000 at 67. today is $102857 Counded to the nearest dollar). The future value at the end of 40 years if you deposit $10000 at 6%. Syears from today's: . CMPD Set: Not Applicable n= 35 I'). = 6 PV: - 10000 PMT= 0 FV: SOLVE 76860.86792 1. The future value at the end of 40 years if you de basit $ 10000 at 67. Syears from today is $76861 (rounded to the nearest dollár). If you invest the $10000 now instead of waiting for 5 years to make the

investment, you would be better off by $102857-1794 - 76860.86792 = $ 25996.31148 $25996 ( rounded to the nearest dollar) Please note that sum on Lumb sum amount I of money can also be solved using formula: f.V= P.V Cd +1%)"