Suzie has $26,997.90 in her account three years from now in her investment.
An investment is an asset or object obtained with the intention of generating profits or appreciation. Appreciation refers to an increase within the fee of an asset over time. when an individual purchases an excellent as an funding, the rationale isn't always to eat the good however alternatively to use it inside the future to create wealth.
investment = $16000
FV = future value
PV = present value = 16,000
r = interest rate = 8% / 4 = 2% per quarter
n = number of quarters = 3 * 4 = 12
The future value of the single investment is:
FV=PV∗(1+r)n
FV=16,000∗(1+0.02)12
FV=$20,291.86
Annuity of $500 per quarter
Let
FVA be the future value of the annuity
PMT be the periodic payment
The future value of the annuity is:
FVA = PMT × (1+r)ⁿ - 1 / r
= 500 × (1+ 0.02)¹² - 1 /0.02
= $6,706.04
After 3 years, her account balance will be the sum of these two future values:
Balance = FV + FVA = 20,291.86 + 6,706.04 = 26,997.90
Suzie will have $26,997.90 in her account.
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