Answer:
Money in 31 years will be = $1,648,641.73
Explanation:
As per the given data:
Inherit Money (PV) = $114,000
Interest rate (i) = 9% p.a (Compounding is done annually as said in the question)
Holding period (n) = 31 years.
Money to have in is the Future value (FV) =?
We can use following time value formula to calculate the future value -
FV = PV * (1 + i) ^ n
putting the values
:
FV = 114,000 * (1 + 0.09) ^ 31
FV = 114,000 * (14.461769531353)
Thus,
Future Value is = $1,648,641.73
