You inherit $114,000 today. Rather than spending it, you decide to invest it. If you earn 9% per year (compounded annually), how much money will you have in 31 years

Money in 31 years will be = $1,648,641.73

Explanation:

As per the given dа ta:

Inherit Money (PV) = $114,000

Interest rate (i) = 9% p. a (Compounding is done annually as said in the question)

Holding period (n) = 31 years.

Money to have in is the Future value (FV) = ?

We can use following time value formula to calculate the future value -

FV = PV * (1 + i) ^ n

putting the values:

FV = 114,000 * (1 + 0.09) ^ 31

FV = 114,000 * (14.461769531353)

Thus,

Future Value is = $1,648,641.73