11. Future Value. You are planning to get married and have a dream wedding. If you...
11. Future Value. You are planning to get married and have a dream wedding. If you are planning to get married in 10 years and the dream wedding is estimated to currently cost $50,000 today, with inflation being estimated at 3%, how much will it cost in 10 years when you are planning to get married?
Homework Answers
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
Hence
A=$50000*(1.03)^10
=$50000*1.343916379
which is equal to
=$67195.82(Approx).
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