Question

Compute the future value of $2,000 compounded annually for 20 years at 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the future value of $2,000 compounded annually for 15 years at 9 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

A) FV= 6414.27

B) FV=2000*(1.09^15)= 7284.97

Explanation:

Giving the following information:

A) Present value=  $2,000

Compounded annually for 20 years at 6 percent.

n= 20

i=0.06

B) Present value= $2,000

Compounded annually for 15 years at 9 percent.

n=15

i= 0.09

To calculate the Final Value we need to use the following formula:

FV= Present value*(1+interest rate)^n

A) FV= 2000*(1.06^20)

FV= 6414.27

B) FV=2000*(1.09^15)= 7284.97