Question

I would love to have this answer with the explanation

Kelly intends to go to law school following the completion of a bachelor's degree. Because she earned academic scholarships that will pay for her undergraduate college tuition, she is able to save for law school. Kelly is an ambitious student and works a part-time job, 20 hours per week during the school year, and then two jobs during the summer weeks totaling 60 hours per week. If Kelly is able to invest $19.000 on August 1, 2018, and $20,000 on August 1, 2019, and $21,000 on August 1, 2020 (that is total investments of $60,000), invested at an annual rate of 6%, compounded annually, how much money will she have for law school on August 1, 2021. Hint: Determine future value.

Answer 1

Here we have to find the future value as on August 1, 2021:

Future value of $19,000 invested in August 1, 2018: Time difference between August 1, 2018 and August 1, 2021 = 3 years

Thus future value = 19,000*(1.06)^3 = $22,629.30

Similarly future values of other 2 investments will be = 20,000*(1.06)^2 + 21,000*(1.06)^1

Thus amount of money that she will have on August 1, 2021 will be = 19,000*(1.06)^3 + 20,000*(1.06)^2 + 21,000*(1.06)^1

= $67,361.30