You invest $3,000 for three years at 12 percent.
a. What is the value of your investment after one year?
The value of investment after one year is $3,360.
Present value (PV) = $3,000
Interest Rate (i) = 12%
Period (n) = 1 year
Question: You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year.
a. What single payment could be made at the beginning of the first year to achieve this objective?
b. What amount could you pay at the end of each year annually for 10 years to achieve this same objective?
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