Answer: We can use the formula for compound interest to find the future value of the $2,000 gift:
FV = PV * (1 + r/n)^(n*t)
where PV is the present value of the gift, r is the annual interest rate, n is the number of compounding periods per year, t is the number of years, and FV is the future value.
In this case, PV = $2,000, r = 0.07 (7%), n = 4 (quarterly compounding), and t = 17. Substituting into the formula, we get:
FV = $2,000 * (1 + 0.07/4)^(4*17)
Simplifying, we get:
FV = $2,000 * (1.0175)^68
Using a calculator, we get:
FV = $6,186.22 (rounded to two decimal places)
Therefore, the $2,000 gift will be worth approximately $6,186.22 in 17 years if it is invested at 7% and compounded quarterly.
Explanation: