Question

The four people below have the following investments. Invested Amount Interest Rate Compounding Jerry $ 11,400 12% Quarterly Elaine 14,400 6 Semiannually George 21,400 8 Annually Kramer 17,400 10 Annually Required: 1-a. Calculate the future value at the end of five years. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 1-b. Who has the greatest investment accumulation

Answer 1

Jerry's future value is $24,978.80

Elaine  future value is  19,352.40

George future value is 31,443.62

Kramer  future value is 28,022.87

Kramer has the greatest investment accumulation because he earned the highest interest.

What are the future values?

The formula for calculating future value:

FV = P (1 + r)^nm

• FV = Future value
• P = Present value
• R = interest rate
• m = number of compounding
• N = number of years

Jerry : 11,400 x ( 1 + 0.12/4)^(4 x 5) = 24,978.80

Elaine : 14,400 x (1 + 0.06/2)^(2 x 5) = 19,352.40

George: 21,400 x (1.08)^5 = 31,443.62

Kramer : 17,400 x (1.10)^5 = 28,022.87

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