Future Value Given an 8 percent interest rate,compute the year 7 future value if deposits of $1,500 and $2,500 are made in years 2 and 3,respectively,and a withdrawal of $2,000 is made in year 5.
A)$1,909.42
B)$3,272.41
C)$3,433.60
D)$5,656.34

Question

Quizplus · Accepted Answer

To find the future value, calculate the future value of each cash flow separately and sum them up. The $1,500 deposit in year 2 grows for 5 years, the $2,500 deposit in year 3 grows for 4 years, and the $2,000 withdrawal in year 5 reduces the future value after growing for 2 years. The calculations are: $1,500 * (1.08)^5 + $2,500 * (1.08)^4 - $2,000 * (1.08)^2 = $3,272.41.

Future Value Given an 8 Percent Interest Rate,compute the Year