Final answer:
The future value of investments for each person after three years is determined by applying the compound interest formula individually, taking into account the principal, interest rate, and compounding frequency specific to each investor.
Step-by-step explanation:
The question pertains to the calculation of the future value of investments at different interest rates and compounding frequencies at the end of three years. The compound interest formula needed to solve this problem is given by:
Future Value = Principal × (1 + interest rate / compounding frequency)compounding frequency × time
Each investor's future value needs to be calculated individually, and the steps are as follows:
• Jerry's Investment: FV = $11,500 × (1 + 0.12 / 4)^(4 × 3)
• Elaine's Investment: FV = $14,500 × (1 + 0.08 / 2)^(2 × 3)
• George's Investment: FV = $21,500 × (1 + 0.07 / 1)^(1 × 3)
• Kramer's Investment: FV = $17,500 × (1 + 0.09 / 1)^(1 × 3)
After calculating the future values, they are not to be summed as each future value pertains to an individual's investment returns over the period. By using the provided formula and plugging in the appropriate numbers, the students can determine the future value of the investments for each person after three years. It's essential to use the correct compounding frequency for each calculation to get accurate results. The concept of compound interest emphasizes the significance of time and the reinvestment of earned interest when growing investments.