Assume you invest $2000 on February 1, 1993, $2000 on February 1, 1994, $2000 on February...

Assume you invest $2000 on February 1, 1993, $2000 on February 1, 1994, $2000 on February 1, 1995, $2000 on February 1, 1996, $2000 on February 1, 1997, $2000 on February 1, 1998, $0 on February 1, 1999, $0 on February 1, 2000, $0 on February 1, 2001, $0 on February 1, 2002, and $0 on February 1, 2003. What is the value of those investments on February 1, 2003? Assume that any money that is invested will earn an interest rate of 10%, compounded annually.

a. 15,431

b. 22,593

c. 37,062

d. 24,852

e. 49,045

Expert Solution

d. 24,852

The final amount = Amount invested*(1+10%)^(Years for which amount invested)

Since, February 1 is the reference for all the investments, we can directly take years in between

Hence, the total amount of February 1, 2003 = $24,852

jeff jeffy answered 1 year ago

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