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Kara George received a $19,000 gift for graduation from her uncle. If she deposits this in...

Kara George received a $19,000 gift for graduation from her uncle. If she deposits this in an account paying 3 percent, what will be the value of this gift in 12 years? Use Exhibit 1-A. (Round FV factor to 3 decimal places and final answer to the nearest whole dollar.)

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Answer #1

Future Value:

Future Value is Value of current asset at future date grown at given int rate or growth rate.

FV = PV (1+r)^n

Where r is Int rate per period

n - No. of periods

Particulars

Amount

Present Value

$           19,000.00

Int Rate

3.0000%

Periods

12

Future Value = Present Value * ( 1 + r )^n

= $ 19000 ( 1 + 0.03) ^ 12

= $ 19000 ( 1.03 ^ 12)

= $ 19000 * 1.4258

= $ 27089.46

Please comment if any further assistance is required

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