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Author Question: If you invest 3,650 today, how much money will you have in 4 years? A) 3,650 B) 4,437 C) This ... (Read 51 times)

dbose

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on: Jul 10, 2018
If you invest 3,650 today, how much money will you have in 4 years?
 
  A) 3,650
  B) 4,437
  C) This question cannot be answered because it is missing an annual rate of return.
  D) This question cannot be answered because it is missing the type of investment made.

Question 2

Which of the following investments has a larger future value: Investment A, a 1,000 investment earning 5 per year for 6 years, or Investment B, a 500 investment earning 10 per year for 6 years, with a bonus of an extra 500 added at the end of the six
 
  A) Investment B, with a future value of 1,386.
  B) Investment A, with a future value of 1,386.
  C) Investment A, with a future value of 1,340.
  D) The investments have equal value.


allisonblackmore

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: C

Answer to Question 2

Answer: A
Explanation: A) Investment A: FV = PV  (1 + r)n = 1,000  (1.05)6 = 1,340.
Investment B: FV = PV  (1 + r)n = 500  (1.10)6 + 500 = 1,386. The future value of Investment B is larger than the future value of Investment A by 46.


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