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Suppose you receive the following end-of-year cash bonuses at work: end of year 2: $4,000 end of year 4: $6,000 end of year 6: $10,000 end of year 8: $12,000 If you invest your bonuses and earn 11% on your investments, how much will you have at the end of year 12? O $64,374 O $58,521 O $53,202 $62,106 $18,647
Suppose you receive the following end-of-year cash bonuses at work: end of year 2: $4,000 end of year 4: $6,000 end of year 6: $10,000 end of year 8: $12,000 If you invest your bonuses and earn 11% on your investments, how much will you have at the end of year 12? O $64,374 O $58,521 O $53,202 $62,106 $18,647
Expert Solution
The amount is computed as shown below:
Future value = Present value x (1 + r)n
So, the amount will be as follows:
= $ 4,000 x 1.11 12 - 2 + $ 6,000 x 1.1112 - 4 + $ 10,000 x 1.1112 - 6 + $ 12,000 x 1.1112 - 8
= $ 4,000 x 1.1110 + $ 6,000 x 1.118 + $ 10,000 x 1.116 + $ 12,000 x 1.114
= $ 11,357.68394 + $ 13,827.22662 + $ 18,704.14552 + $ 18,216.84492
= $ 62,106
Feel free to ask in case of any query relating to this question
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