Question

1 .You work for a company that gives you an annual bonus of $5,000 a year that increases 5% for 3 years. This deferred compensation plan pays 8% annually. Using the formula attached, what would the accumulated value of your investment be at the end of 3 years?

	Compound Interest
	Investment	$10,000
	Interest	6%
	Term (n)	4
	Years Invested	1
	Total	$10,613.64

Determining Future Value
Investment (Bonus)	$10,000
Increase	7%
Term in Years	5
Annual Payment Percentage	10%
Total	$76,251.37

2) You have a $20,000 investment that pays 4% semi-annually for 2 years. What is the future value of your investment in 2 years?

Answer 1

1 .You work for a company that gives you an annual bonus of $5,000 a year that increases 5% for 3 years. This deferred compensation plan pays 8% annually. Using the formula attached, what would the accumulated value of your investment be at the end of 3 years?
Determining Future Value
Investment (Bonus)	5000
Increase	5%
Term in Years	3
Annual Payment Percentage	8%
Total	18375.66
	A	B	C = (A+B)*8%	A+ B + C
Year	Beginning Balance	Savings @ 5%	Earnings @ 8%	Ending balance
1	0	5000	400	$   5,400.00
2	5400	5250	852	$ 11,502.00
3	11502	5512.5	1361.16	$ 18,375.66
2) You have a $20,000 investment that pays 4% semi-annually for 2 years. What is the future value of your investment in 2 years?
Compound Interest
Investment	20000
Interest	4%
Term (n)	2
Years Invested	2
Future Value = FV (rate, nper, pmt, [pv], [type]) ; FV(4%/2,2*2,0,-20000,1)	$21,648.64