Question

You are scheduled to receive $42,000 in two years. when you receive it, you will invest it for 8 more years at 6.5 percent per year. how much will you have in 10 years?

Answer 1

So the first 2 years you have nothing because you didn't in invest. After 2 yrs you receive the $42,000 which you now invest for the next 8 yrs.

The formula is:
42,000 * (1+0.065 * 8) = 42,000* (1+ 0,52) = $63,840
That is after 8 yrs of investing plus the 2 years prior to receiving the money is 10 yrs.

After 10 years you will have $63,840