iulia has been a good saver during her time at university whilst working a part-time job, and has managed to save an amount of $15 000 whilst completing her degree. She wants to invest this money for the next 5 years, as otherwise she will be tempted to spend it on a holiday or a new car. Giulia seeks your assistance as she knows you are currently studying a finance unit. a) Determine the value in 5 years of a $15 000 investment at a compound interest rate of 6.75% p.a. compounding annually. Show formula, variables, calculation and a concluding statement in your response. Formula Variables Calculation Concluding Statement
Giulia has been a good saver during her time at university whilst working a part-time job, and has managed to save an amount of $15 000 whilst completing her degree. She wants to invest this money for the next 5 years, as otherwise she will be tempted to spend it on a holiday or a new car.
Giulia seeks your assistance as she knows you are currently studying a finance unit.
a) Determine the value in 5 years of a $15 000 investment at a
Show formula, variables, calculation and a concluding statement in your response.
| Formula |
|---|
| Variables |
| Calculation |
| Concluding Statement |
To calculate the value of the investment after 5 years from now we will use the below formula
Future value = PV*(1+r)n
Where
PV - Investment amount i.e. $15,000
r - Annual interest rate i.e. 6.75%
n - Period i.e. 5 Years
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