You want to invest $10,000 for 20 years at 10 % interest compounded quarterly. How much money will you have at the end of the 20 years?
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Solve |
Step |
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i = 0.10 ÷ 4 = 0.025 |
k = 4, r = 0.10, Quarterly means 4 times a year |
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FV = PV(1 + i)kn |
PV = 10,000, n = 20 years |
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FV = 10,000(1 + 0.025)4(20) |
Find the Future Value |
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FV = 10,000(1.025)80 » 72,095.68 |
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| You would have $72,095.68 after 20 years. (before taxes) | |
| Hint: don't round until you are completely finished with your calculations. | |