Question

Beginning today, you will make 3 investments as listed in the table below. What will they be worth at time 6 ? The interest rate is 11.31%

0 1 2
$1118 $2268 $3156

Answer 1

To calculate the future value of investments, use the formula for compound interest: FV = PV(1 + r)^n. For $1118, the future value at time 6 is $2257.64. For $2268, the future value at time 6 is $4609.66. And for $3156, the future value at time 6 is $6422.89.

Step-by-step explanation:

To calculate the future value of the investments at time 6, we can use the formula for compound interest:

FV = PV(1 + r)^n

where FV is the future value, PV is the present value, r is the interest rate, and n is the number of periods.

For the first investment ($1118), the present value is $1118, the interest rate is 11.31% (converted to decimal form is 0.1131), and the number of periods is 6. Plugging these values into the formula, we get:

FV = 1118(1 + 0.1131)^6 = $2257.64

Similarly, for the second investment ($2268), the future value at time 6 is $4609.66, and for the third investment ($3156), the future value at time 6 is $6422.89.