# 1. You are scheduled to receive $7,500 in two years. When you receive it, you will invest it at... ## Question: 1. You are scheduled to receive$7,500 in two years. When you receive it, you will invest it at 4.5 percent per year. How much will your investment be worth ten years from now?

 $10,665.75$11,428.09 $9,110.24$10,113.33 $11,617.07 2. Western Bank pays 5 percent simple interest on its savings account balances, whereas Eastern Bank pays 5 percent compounded annually. If you deposited$6,000in each bank, how much more money would you earn from the Eastern Bank account at the end of 3 years?

 $55.84$45.75 $60.47$40.09 $50.14 3. At 10 percent interest, how long does it take to triple your money? 14.33 years 11.53 years 9.67 years 10.36 years 10.56 years 4. You have$500 today and want to triple your money in 6 years. What interest rate must you earn if the interest is compounded annually?

 18.08 percent 19.90 percent 22.15 percent 20.09 percent 21.21 percent

## Future Value

The future value of an asset is the value of the asset at a specified point in the future. The present value of the asset is compounded using the interest rate (growth rate) that is provided. In a positive interest rate environment, the future value of an asset will be greater than the present value of the same asset.

The formula to calculate the future value is:

{eq}Future\ Value = Present\ Value \times (1 + i)^{t} {/eq}

where i is the the interest rate and t is the number of periods into the future being calculated.