Joe expects to receive a gift of $1,000 when he graduates one year from today.Joe can invest his gift at 6% compounded annually and he would like to use the funds in four years to purchase an engagement ring for Mabel.How much will he have in four years to spend on a ring?
A) $1,191.02
B) $1,180.00
C) $1,200.00
D) $1,262.48
E) $1,175.00

Question

Quizplus · Accepted Answer

FV = PV × 11ea7fdb_fc24_161b_a768_19dbdd1d5561_TB2902_00 FV = 1,000 × (1.06 11ea7fdb_fc24_161c_a768_eb0a4b21d3f5_TB2902_00 = $1,191.02
Using a financial calculator:
N = 3, I/Y = 6, PV = -1000, PMT = 0, cpt FV = $1,191.02

Joe Expects to Receive a Gift of $1,000 When He