You are scheduled to receive $17,000 in two years. When you receive it, you will invest it for six more years at 9.75 percent per year. How much will you have in eight years? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Question

Brynlee Dalton

Business

22 January, 03:21

You are scheduled to receive $17,000 in two years. When you receive it, you will invest it for six more years at 9.75 percent per year. How much will you have in eight years? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

+1

Answers (1)

Know the Answer?

Brody Lam · Answer 1

The investment would likely be $29,708.18 in six years' time

Explanation:

The $17000 receivable in two years would be invested for eight years less two years, in other words, it would be invested for only 6 years at the rate of 9.75 per year.

The formula applicable here is FV=PV * (1+r) ^n

FV represents future value of the investment which is unknown

PV is the amount invested, that is $17000

r is the rate at 9.75%

n is the number year is 6 years

FV=$17000 * (1+0.0975) ^6

FV=$29708.18

Six years is the applicable time horizon for the investment as the funds are receivable in two years' time