Question

If you invest $9,800 per period for the following number of periods, how much would you have in each of the following instances? use appendix c for an approximate answer, but calculate your final answer using the formula and financial calculator methods. in 7 years at 9 percent?

Answer 1

To calculate how much you would have after investing $9,800 annually for 7 years at 9%, you use the future value of an annuity formula. Plug in the payment per period, interest rate, and number of periods into the formula or a financial calculator to compute the final amount.

Step-by-step explanation:

To determine how much you would have after investing $9,800 per period for 7 years at a 9% interest rate, we would use the future value of an annuity formula. The formula for the future value of an annuity is FV = P * [((1 + r)^n - 1) / r], where P is the payment per period, r is the interest rate per period, and n is the number of periods.

Using the formula and a financial calculator, you would input the following values:

• P (the payment per period): $9,800
• r (the interest rate per period): 9% or 0.09
• n (the number of periods): 7 (years)

This results in FV = $9,800 * [((1 + 0.09)^7 - 1) / 0.09]. Calculating this will give you the total amount after 7 years.

Remember that compound interest significantly increases the future value of your investments over time. Starting to save money early, as the example with $3,000 invested at a 7% return over 40 years shows, can result in substantial growth due to compound interest.