Question

A Asset Valuation = Price B Wealth Accumulation C Funding – Lump sum funds lump sum D Funding – Lump sum funds ordinary level annuity E Funding – Lump sum funds delayed level annuity F Funding – Ordinary level annuity funds lump sum G Funding – Ordinary level annuity funds delayed level annuity H Choosing Among Alternatives Classify the problem as one of the above types. Choose Only One You receive $4,122 today and in one year. If you invest this money in an account that pays 3.47% compounded annually, how much will you have in the account in 10 years?

Answer 1

It is C Funding – Lump-sum funds lump sum type problem where we deposit a lump sum amount and receive or calculate the lump sum amount at the end of ten years.

4122 today, if deposited in the account which pays, 3.47% compounded annually will grow in 10 years to = 4122*(1.0347^10) = 5797.656