Problem No.

27

A person invests $450 to be collected in 8 yr. Given the interest rate on the investment is 14.5
%/year, compounded annually, most nearly what sum will be collected 6 years from now?

A. $1050 B. $1130 C. $1240 D. $1330

Given: Schematic Diagram:

$450 = Present Value =

n = 8 years

14.5%/year = interest compounded annually

Required:

F @ n = 6 years

Solution:

F = P (1+i) n

F = $450 (1+0.145)6 = $1014.017462

Therefore, the answer is $1014.017462

Problem No. 27

A person invests $450 to be collected in 8 yr. Given the interest rate on the investment is 14.5
%/year, compounded annually, most nearly what sum will be collected 6 years from now?

A. $1050 B. $1130 C. $1240 D. $1330

Given: Schematic Diagram:

$450 = Present Value =

n = 8 years

14.5%/year = interest compounded annually

Required:
 F @ n = 6 years

Solution:

F = P (1+i) n

F = $450 (1+0.145)6 = $1014.017462

Therefore, the answer is $1014.017462

Problem No. 27

A person invests $450 to be collected in 8 yr. Given the interest rate on the investment is 14.5
%/year, compounded annually, most nearly what sum will be collected 6 years from now?

A. $1050 B. $1130 C. $1240 D. $1330

Given: Schematic Diagram:

$450 = Present Value =

n = 8 years

14.5%/year = interest compounded annually

Required:

F @ n = 6 years

Solution:

F = P (1+i) n

F = $450 (1+0.145)6 = $1014.017462

Therefore, the answer is $1014.017462