Assume you invest $15,000 today. How much will you have in six years at an interest rate of 9%? Future Value of $1: 8% 123456 1.080 1.166 1.260 1.360 1.469 1.587 9% 1.090 1.188 1.295 1.412 1.539 1.677 10% 1.100 1.210 1.331 1.464 1.611 1.772

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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**Investment Calculation**

Assume you invest $15,000 today. How much will you have in six years at an interest rate of 9%?

**Future Value of $1:**

| Year | 8%   | 9%   | 10%  |
|------|------|------|------|
| 1    | 1.080| 1.090| 1.100|
| 2    | 1.166| 1.188| 1.210|
| 3    | 1.260| 1.295| 1.331|
| 4    | 1.360| 1.412| 1.464|
| 5    | 1.469| 1.539| 1.611|
| 6    | 1.587| 1.677| 1.772|

**Options:**

- A. $23,805
- B. $25,155
- C. $26,580
- D. $23,085

**Explanation:**

To solve this question, multiply the $15,000 investment by the future value factor for six years at a 9% interest rate. Based on the table, the factor for 9% over six years is 1.677.

\[ \text{Future Value} = \$15,000 \times 1.677 = \$25,155 \]

**Answer: B. $25,155**
Transcribed Image Text:**Investment Calculation** Assume you invest $15,000 today. How much will you have in six years at an interest rate of 9%? **Future Value of $1:** | Year | 8% | 9% | 10% | |------|------|------|------| | 1 | 1.080| 1.090| 1.100| | 2 | 1.166| 1.188| 1.210| | 3 | 1.260| 1.295| 1.331| | 4 | 1.360| 1.412| 1.464| | 5 | 1.469| 1.539| 1.611| | 6 | 1.587| 1.677| 1.772| **Options:** - A. $23,805 - B. $25,155 - C. $26,580 - D. $23,085 **Explanation:** To solve this question, multiply the $15,000 investment by the future value factor for six years at a 9% interest rate. Based on the table, the factor for 9% over six years is 1.677. \[ \text{Future Value} = \$15,000 \times 1.677 = \$25,155 \] **Answer: B. $25,155**
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