Question

Calculate the future value in six years of $8,000 received today if your investments pay for the following interest rates. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

Answer 1

To calculate the future value of $8,000 invested today with different interest rates, you can use the Future Value formula. Plugging in the values, the future values at 5%, 7%, and 10% interest rates are $10,883.18, $12,008.50, and $14,693.28 respectively.

Step-by-step explanation:

In order to calculate the future value of $8,000 invested today, we need to take into account the interest rates. Let's assume there are three different interest rates you need to consider: 5%, 7%, and 10%. To calculate the future value, we can use the formula:

Future Value = Present Value × (1 + Interest Rate)^(Number of Years)

For 5% interest rate:

Future Value = $8,000 × (1 + 0.05)^6

For 7% interest rate:

Future Value = $8,000 × (1 + 0.07)^6

For 10% interest rate:

Future Value = $8,000 × (1 + 0.10)^6

Calculating these values, we get:

For 5% interest rate: $10,883.18

For 7% interest rate: $12,008.50

For 10% interest rate: $14,693.28