You inherit $114,000 today. Rather than spending it, you decide to invest it. If you earn 9% per year (compounded annually), how

Question

3 years ago

15

much money will you have in 31 years

1 answer:

Gelneren [198K] · Answer 1 · 2022-01-04T12:31:36+03:00

Answer:

Money in 31 years will be = $1,648,641.73

<u>Explanation:</u>

As per the given data:

Inherit Money (PV) = $114,000

Interest rate (i) = 9% p.a (Compounding is done annually as said in the question)

Holding period (n) = 31 years.

Money to have in is the Future value (FV) =?

We can use following time value formula to calculate the future value -

FV = PV * (1 + i) ^ n

putting the values :

FV = 114,000 * (1 + 0.09) ^ 31

FV = 114,000 * (14.461769531353)

Thus,

Future Value is = $1,648,641.73