QuestionJuly 11, 2025

If you invest 1,000 at the beginning of each of the next 3 years at 8% how much would you have at the end of year 3? 3417.10 3506.11 3783.26 3818.70

If you invest 1,000 at the beginning of each of the next 3 years at 8% how much would you have at the end of year 3? 3417.10 3506.11 3783.26 3818.70
If you invest 1,000 at the beginning of each of the next 3 years at 8%  how much
would you have at the end of year 3?
 3417.10
 3506.11
 3783.26
 3818.70

Solution
4.7(230 votes)

Answer

\ 3246.40 Explanation 1. Calculate Future Value of Each Investment Use the formula for future value of an annuity: **FV = P \times \frac{(1 + r)^n - 1}{r}**, where P = 1000, r = 0.08, and n = 3. Calculate separately for each year. 2. Calculate Future Value for Year 1 Investment FV_1 = 1000 \times (1.08)^2 = 1166.40 3. Calculate Future Value for Year 2 Investment FV_2 = 1000 \times (1.08)^1 = 1080.00 4. Calculate Future Value for Year 3 Investment FV_3 = 1000 \times (1.08)^0 = 1000.00 5. Sum All Future Values Total Future Value = FV_1 + FV_2 + FV_3 = 1166.40 + 1080.00 + 1000.00 = 3246.40

Explanation

1. Calculate Future Value of Each Investment<br /> Use the formula for future value of an annuity: **$FV = P \times \frac{(1 + r)^n - 1}{r}$**, where $P = 1000$, $r = 0.08$, and $n = 3$. Calculate separately for each year.<br /><br />2. Calculate Future Value for Year 1 Investment<br /> $FV_1 = 1000 \times (1.08)^2 = 1166.40$<br /><br />3. Calculate Future Value for Year 2 Investment<br /> $FV_2 = 1000 \times (1.08)^1 = 1080.00$<br /><br />4. Calculate Future Value for Year 3 Investment<br /> $FV_3 = 1000 \times (1.08)^0 = 1000.00$<br /><br />5. Sum All Future Values<br /> Total Future Value = $FV_1 + FV_2 + FV_3 = 1166.40 + 1080.00 + 1000.00 = 3246.40$
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