14. The time line represents which investment scenario? Today 12 18 months months months months 24 30 36 months months $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500.00 $2500(1.029) = $2572.50 $2500(1.029)2= $2647.10 $2500(1.029)- $2723.87 $2500(1.029) = $2802.86 $2500(1.029)= $2884.14 $2500(1.029)= $2967.78 $2500(1.029) $3053.85 $2500(1.029)8 $3142.41 $2500(1.029) $3233.54 $2500(1.029)10= $3327.31 > $2500(1.029)11 $3423.81 %D %3D %3D Total = $35 279.17 %3D a. Future Value of $2500 invested monthly for 3 years in a fund that pays 2.9% per year, compounded monthly b. Future Value of $2500 invested monthly for 3 years in a fund that pays 34.3% per year, compounded monthly c. Future Value of $2500 invested quarterly for 3 years in a fund that pays 11.6% per year, compounded quarterly d. Present Value of $2500 invested monthly for 3 years in a fund that pays 2.9% per year, compounded monthly e. Present Value of $2500 invested monthly for 3 years in a fund that pays 34.3% per year, compounded monthly f. Future Value of $2500 invested semi-annually for 3 years in a fund that pays 5.8 % per year, compounded semi-annually

14. The time line represents which investment scenario? Today 12 18 months months months months 24 30 36 months months $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500.00 $2500(1.029) = $2572.50 $2500(1.029)2= $2647.10 $2500(1.029)- $2723.87 $2500(1.029) = $2802.86 $2500(1.029)= $2884.14 $2500(1.029)= $2967.78 $2500(1.029) $3053.85 $2500(1.029)8 $3142.41 $2500(1.029) $3233.54 $2500(1.029)10= $3327.31 > $2500(1.029)11 $3423.81 %D %3D %3D Total = $35 279.17 %3D a. Future Value of $2500 invested monthly for 3 years in a fund that pays 2.9% per year, compounded monthly b. Future Value of $2500 invested monthly for 3 years in a fund that pays 34.3% per year, compounded monthly c. Future Value of $2500 invested quarterly for 3 years in a fund that pays 11.6% per year, compounded quarterly d. Present Value of $2500 invested monthly for 3 years in a fund that pays 2.9% per year, compounded monthly e. Present Value of $2500 invested monthly for 3 years in a fund that pays 34.3% per year, compounded monthly f. Future Value of $2500 invested semi-annually for 3 years in a fund that pays 5.8 % per year, compounded semi-annually

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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