Question

Hateem currently plans to invest $1,800 in the Shariah compliance stock market. In average he earns 10% per year on his stocks. What will be the amount after 30 years if Hateem starts to invest the money at the beginning of each year?

Select one:

a. $325,698

b. $199,000

c. $152,615

d. $296,089

e. $196,400

Answer 1

Ensure your calculator is in BGN Mode (i.e. beginning of the year)

Using your financial calculator, the calculation is as follows:

1. 2ND FV = To clear previous calculation

2. N= number of years=30 years, therefore enter 30 (calculation is on an annual basis in this case)

3. I/Y= interest rate per year= 10%,therefore enter 10 (this is return in our question)

4. PMT= amount of payment= $1800,therefore enter -1800 (since our account would be decreasing when we make this payment)

5. Press CPT FV, the calculator will display "FV = 325,698.1649"

Answer = a) $325,698