Question

Problem 5-1 Future Value (LG5-1) 

Compute the future value in year 9 of a $3,300 deposit in year 1, and another $2,800 deposit at the end of year 5 using a 9 percent interest rate. (Do not round intermediate calculations and round your final answer to 2 decimal places.) 

Future value = _______ 

Answer 1

The future value is computed as shown below:

Future value = Present value ( 1 + r )ⁿ

= $ 3,300 x 1.09⁸ + $ 2,800 x 1.09⁴

= $ 10,527.89 Approximately