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20 September, 01:25

Dwayne plans to invest $4,700 in a savings account at the beginning of each of the next 12 years. If his opportunity cost rate is 7 percent compounded annually, how much will his investment be worth at the end of 12 years?

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  1. 20 September, 02:48
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    his investment will be worth $39,944 at the end of 12 years.

    Explanation:

    FV = PV (1 + i) ^n

    = $4,700 + $4,700*PVAF (7%,11 years)

    = $4,700 + $4,700*7.49867

    = $4,700 + $35,244

    = $39,944

    Therefore, his investment will be worth $39,944 at the end of 12 years.
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