Question

An investment of $3,000 is made at the beginning of each of the next 7 years. given an interest rate of 0.67%, the value of this investment 11 years from today is closest to:________

Answer 1

There is an annuity owed on this cash flow stream.

Given:

Investment: $3,000

made at the beginning of each of the next 7 years.

Interest Rate: 0.67%

BGN mode on the calculator, then

$3,000 PMT, N = 7, I/Y = 0.67, CPT FV, and FV = $21570.41

After an additional four years (Year 11), the cash flow stream's future value is equal to:

N = 4, I/Y = 0, PV = around $21,570.41, CPT FV, FV = $22,154.32, and N = 4