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
Related questions
Question
Assume you just received a monetary gift of $1,000, and decided to invest it in a certificate of Deposit (CD) for 5 years, at a steady annual yield of 3.5 percent. How much would be the total value of your investment at the maturity date?
Expert Solution
Step 1
Future value = Present value (1 + rate)^periods
Future value = 1000 (1 + 0.035)^5
Future value = 1000 * 1.18769
Future value = $1,187.69
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