Question

If you invest $13,000 today, how much will you have in each of the following cases? Enter all answers as positive amounts.

a. In 9 years at 8 percent? (Round your final answer to 2 decimal places.)
  

b. In 18 years at 11 percent? (Round your final answer to 2 decimal places.)
  

c. In 25 years at 10 percent (compounded semiannually)? (Round your final answer to 2 decimal places.)
  

Answer 1

a.We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=13000*(1.08)^9

=13000*1.99900463

=$25987.06(Approx)

b.We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=13000*(1.11)^18

=13000*6.54355291

=$85066.19(Approx)

c.We use the formula:
A=P(1+r/2)^2n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=13000*(1+0.1/2)^(2*25)

=13000*11.4673998

=$149076.2(Approx).