Question
1 .You work for a company that gives you an annual bonus of $5,000 a year that increases 5% for 3 years. This deferred compensation
1 .You work for a company that gives you an annual bonus of $5,000 a year that increases 5% for 3 years. This deferred compensation plan pays 8% annually. Using the formula attached, what would the accumulated value of your investment be at the end of 3 years?
| Compound Interest | ||
| Investment | $10,000 | |
| Interest | 6% | |
| Term (n) | 4 | |
| Years Invested | 1 | |
| Total | $10,613.64 | |
| Determining Future Value | |
| Investment (Bonus) | $10,000 |
| Increase | 7% |
| Term in Years | 5 |
| Annual Payment Percentage | 10% |
| Total | $76,251.37 |
2) You have a $20,000 investment that pays 4% semi-annually for 2 years. What is the future value of your investment in 2 years?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Part 1 Accumulated Value of Bonus after 3 Years Given Annual bonus5000 Annual increase5 Number of ye...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Fundamentals of Financial Accounting
Authors: Fred Phillips, Robert Libby, Patricia Libby
5th edition
78025915, 978-1259115400, 1259115402, 978-0078025914
