Asked by Mallory Sheets on May 11, 2024
Verified
Beverly Forest is a single parent with twin daughters who are now seniors in high school. Beverly inherited money from her father's estate and decided that it would be reasonable to save $50,000 of the inheritance for wedding expenses in the event that both daughters should decide to get married in the same year. How much money will Beverly have in 4 years if she can invest the $50,000 and get a return of 8% compounded quarterly? (Use Tables 16-1A&B or 16-2A&B or a calculator.)
Inherited Money
Wealth or assets received from someone after their death.
Wedding Expenses
The costs associated with organizing a wedding ceremony and reception.
- Calculate the future value of investments using the formula for compound interest.
- Use financial tables or calculators to solve time value of money problems.
- Understand the impact of different compounding periods on the growth of investments.
Verified Answer
SC
Sanya ChauhanMay 12, 2024
Final Answer :
0.08 ¸ 4 = 0.02; 4 ´ 4 = 16;
$50,000 ´ 1.37279 = $68,639.50 in 4 years
$50,000 ´ 1.37279 = $68,639.50 in 4 years
Learning Objectives
- Calculate the future value of investments using the formula for compound interest.
- Use financial tables or calculators to solve time value of money problems.
- Understand the impact of different compounding periods on the growth of investments.
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