Joe expects to receive a gift of $1,000 when he graduates one year from today. Joe...
Joe expects to receive a gift of $1,000 when he graduates one year from today. Joe can invest his gift at 6% compounded annually and he would like to use the funds in four years to purchase an engagement ring for Mabel. How much will he have in four years to spend on a ring?
A.$1,200.00
B.$1,180.00
C.$1,175.00
D.$1,191.02
E.$1,262.48
Homework Answers
Future Value = Present Value * ( 1+ Rate of Interest ) ^ Time
= $ 1000 * ( 1+ 6%) ^ 3
= $ 1,191.02
Hence the correct answer is D. $ 1,191.02
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