Question

4-2 Future value calculation Without referring to tables or to the preprogrammed function on your financial calculator, use the basic formula for future value along with the given interest rate, i, and the number of periods, n, to calculate the future value interest factor in each of the cases shown in the following table. Compare the calculated value to the value in Appendix Table A-1. Case Interest rate, i Number of periods, 12%

Answer 1

FV factor = [(1 + i)ⁿ - 1] / i

Case	i	n	FV factor
			[(1 + i)n - 1] / i
A	12%	2	2.12000
B	6%	3	3.18360
C	9%	2	2.09000
D	3%	4	4.18363

The last column contains your answer.

Comparison with the value on Appendix table 1 can be done by you only because you are the only one in possession of that table.