Simone owns an investment that began with $30,000 up front and to which she made $120 monthly payments. The investment is growing at an APR of 11.73%. Simone wants to know how much her investment grew in value from year 30 to 33. What was Simone's total investment growth in those three years?
Simone owns an investment that began with $30,000 up front and to which she made $120 monthly payments. The investment is growing at an APR of 11.73%. Simone wants to know how much her investment grew in value from year 30 to 33. What was Simone's total investment growth in those three years?
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
Problem 1PS
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Transcribed Image Text:**Investment Growth Analysis**
Simone owns an investment that began with an initial amount of $30,000. In addition to this upfront investment, she contributed $120 as monthly payments. The investment is characterized by an Annual Percentage Rate (APR) of 11.73%.
Simone aims to determine the growth in value of her investment over a period from year 30 to year 33. Specifically, she wants to know the total investment growth during these three years.
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Expert Solution
Step 1: Define future value
The future value of investment refers to the final amount that an investment will be worth after a specific period of time. It is calculated by considering factors such as the initial investment amount, the interest rate or return on investment, and the length of time the investment is held. The future value of an investment helps investors determine the potential growth or profitability of their investments over time.
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