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2 February, 04:32

You estimate that you can save $3,800 by selling your home yourself rather than using a real estate agent. What would be the future value of that amount if invested for five years at 5 percent? Use Exhibit_1-A. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

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  1. 2 February, 04:45
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    Step-by-step explanation:

    Assuming it was compounded annually. We would apply the formula for determining compound interest which is expressed as

    A = P (1+r/n) ^nt

    Where

    A = total amount in the account at the end of t years

    r represents the interest rate.

    n represents the periodic interval at which it was compounded.

    P represents the principal or initial amount deposited

    From the information given,

    P = $3800

    r = 5% = 5/100 = 0.05

    n = 1 because it was compounded once in a year.

    t = 5 years

    Therefore,.

    A = 3800 (1 + 0.05/1) ^1 * 5

    A = 3800 (1.05) ^5

    A = 3800 * 1.276

    A = $4848.80
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