Quiz Quiz 5a Chapter 5 Tlme Value of Money Time Remaining 0

Quiz: Quiz 5a Chapter 5 Tlme Value of Money Time Remaining: 0 Submit Qui 05 38 This question: 9 pts 9 of 11 (0 complete) This Quiz: 59 pts Time value Personal Finance Poble You can deposit $10,000 into an account payng 9% annual interest et er today ready 5 years from today How much better off wil you be at the end of 30 years if you decide to make the initial deposit today rather than 5 years from today? The future value atthe end of 30 years if you deposit S 10,000 at 9% today is sr] (Round to the nearest dolar ) The future value atthe end of 30 years if you deposit S10,000 at996 5 years from today is S? Round to the nearest dollar) If you invest the $10,000 now instead of waiting tor 5 years to make the investment, you would be better off by S(Round to the nearest dollar) of of er in each of the answer boxes

Solution

FV= PV*(1+r)^n

FV of $10000 deposited today = 10000*(1+0.09)^30 = 132676.78

= 132677

FV of $10000 deposited after 5 years = 10000*(1+0.09)^25 = $86,230.81

= 86231

If you invest the money now, amount by which you would be better off= 132676.78- $86,230.81

= $46,445.98

= $46,446