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7th Edition

Stefan Waner + 1 other

Publisher: Cengage Learning

ISBN: 9781337274203

Chapter 3.2, Problem 5E

Textbook Problem

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In Exercises 1–10, calculate, to the nearest cent, the future value of an investment of $10,000 at the stated interest rate after the stated amount of time. [**hinT:** See Quick Examples 1 and 2.]

3% per year, compounded annually, after 10 years

To determine

**To calculate:** The future value of an investment of $10,000 after 10 years at

**Given Information:**

An investment of $10,000 is made for 10 years at

**Formula used:**

The future value of an investment of *PV* dollars earning compound interest at a rate of *i* per compounding period for *n* periods is given by:

Where *r* is the annual interest rate compounded *m* times a year for *t* years.

**Calculations:**

Consider the provided information,

An investment of $10,000 is made for 10 years at

Since, the present value invested is $10,000,

Hence,

Also, since they are invested for a period of 10 years,

And since, the interest rate is

Hence, *r* is given by,

And since, it is compounded annually,

Finite Mathematics and Applied Calculus (MindTap Course List)

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