Answer:
Future value at the end of 19 years =$63,637.94
Explanation:
<em>The Future value (FV) of an investment is the total amount (principal plus interest) that will accumulate in the future where interest is paid and compounded at a particular rate per period for a certain number of periods.</em>
This can be done using the formula below
FV = PV × (1+r)^(n)
FV- Future Value
PV- amount invested, n- number of years, r - interest rate
The amount due after 19 years would be determined in two steps
Step 1: FV of 24,500 at 5.5% for 8 years
FV = 24,500× (1+0.055)^8 =37,599.819
Step 2 : FV of 37599.81962 invested for 11 years at 4.9% p.a
FV = ? P=37,599.81, n- 11, r- 4.9%
FV = 37,599.81 × (1.049)^11= 63,637.94
Future value at the end of 19 years =$63,637.94
