You are scheduled to receive $16,000 in two years. when you receive it, you will invest it for eight more years at 9.25 percent per year. how much will you have in ten years?

Question

Mathematics

Renee

1 September, 01:52

You are scheduled to receive $16,000 in two years. when you receive it, you will invest it for eight more years at 9.25 percent per year. how much will you have in ten years?

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Answers (1)

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Shea Newman · Answer 1

I will have $32 470.69 in 10 yr.

I am not investing until 2 yr from now so, in 10 yr time, I will have invested for only 8 yr.

The formula for the future value (FV) of my investment is

FV = C (1 + r) ^n

where C = my initial cash

r = the interest rate

n = the number of years

FV = $16 000 (1.0925) ^8 = $32 470.69