she will be paying you 25857 at the end of this year, 51807 at the end of the following year, and 75702 at the end of the year after that(three years from today) the interest rate is 8.8% per year? what is the future value of your windfall in three years(on the date of the last payment)
Question
she will be paying you 25857 at the end of this year, 51807 at the end of the following year, and 75702 at the end of the year after that(three years from today) the interest rate is 8.8% per year? what is the future value of your windfall in three years(on the date of the last payment)
Solution
To calculate the future value of your windfall in three years, we need to consider each payment separately and then add them together.
-
The first payment of 25857 is already at the end of the third year, so it doesn't need to be adjusted.
-
The second payment of 51807 needs to be compounded for one year. Using the formula for future value FV = PV * (1 + r)^n, where PV is the present value, r is the interest rate, and n is the number of periods, we get FV = 51807 * (1 + 0.088)^1 = 56364.616.
-
The third payment of 75702 needs to be compounded for two years. Using the same formula, we get FV = 75702 * (1 + 0.088)^2 = 90204.68144.
Adding these three amounts together, the future value of your windfall in three years is 25857 + 56364.616 + 90204.68144 = 172426.29744.
So, the future value of your windfall in three years is approximately 172426.30 (rounded to the nearest cent).
Similar Questions
Your aunt has gifted you a growing perpetuity. The first payment will occur in a year and will be $3,037. Each year after that, on the anniversary of the last payment, you will receive a payment that is 3% larger than the last payment. This pattern of payments will go on forever. If the interest rate is 8% per year, the value of the bequest today is closest to? (Round your answer in dollars to 2 decimal places, e.g. put 1204.42 if your answer is 1204.4243.)
How much interest will Karen pay over the life of the loan? (Round intermediate calculations to 2 decimal places and round your final answer to the nearest dollar.)
A rich aunt has promised you $4 000 one year from today. In addition, each year after that, she has promised you a payment (on the anniversary of the last payment) that is 3% larger than the last payment. She will continue to show this generosity for 20 years, giving a total of 20 payments. If the interest rate is 4%, what is her promise worth today?
Karen obtained a $36,000 loan at 3.5% compounded semiannually.a-1. What monthly payment will repay the loan in 8 1/2 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)Monthly payment $ a-2. How much interest will Karen pay over the life of the loan? (Round intermediate calculations to 2 decimal places and round your final answer to the nearest dollar.)Total interest $
Jessica deposits $2000 into an account that pays simple interest at a rate of 3% per year. How much interest will she be paid in the first 5 years?$
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.