Question

Your aunt is a songwriter and will receive three royalty payments because of a hit song she wrote. She will receive $43,655 at the end of this year, $87,310 at the end Question list of next year, and $130,965 at the end of the year after that (three years from today). If the interest rate is 3.7% per year, what is the future value of your aunt's royalty payments in three years (immediatley after the last payment)? Question 4 The future value of your aunt's royalty payments in three years is $ (Round to the nearest dollar.)

Answer 1

The future value of your aunt's royalty payments in three years is approximately $272,270.

Step-by-step explanation:

To calculate the future value of your aunt's royalty payments, we can use the formula for compound interest: Future Value = Principal × (1 + interest rate)time. In this case, the principal is the sum of all the royalty payments, which is $43,655 + $87,310 + $130,965. The interest rate is 3.7% per year, and the time is three years. Plugging those values into the formula, we get:

Future Value = ($43,655 + $87,310 + $130,965) × (1 + 0.037)3 ≈ $272,270.

Therefore, the future value of your aunt's royalty payments in three years is approximately $272,270.