Answer and Explanation:
The computation of the future value in each case is shown below:
a. For 5 years, its is
Future value = Present value × (1 + interest rate)^number of years
= $7,000 × (1 + 0.067 ÷ 365 days)^ 5 × 365 days
= $7,000 × 1.397897
= $9,785.28
b. For 10 years, its is
Future value = Present value × (1 + interest rate)^number of years
= $7,000 × (1 + 0.067 ÷ 365 days)^ 10 × 365 days
= $7,000 × 1.954117
= $13,678.82
c. For 20 years, its is
Future value = Present value × (1 + interest rate)^number of years
= $7,000 × (1 + 0.067 ÷ 365 days)^ 20 × 365 days
= $7,000 × 3.818574
= $26,730.02
