Question

Your grandparents have given you an early college gift of $5,000 that you would like to save to fund a post-graduation trip to Europe in 3 years. How much will you have for your trip in 3 years if you can invest this gift at 5% compounded annually? (express your answer as the nearest whole dollar amount?

Answer 1

Answer:

Amount after 3 years will be $5788.125

Explanation:

We have given amount which she got as a gift is $5000

Time period is 3 years

So n = 3 years

Rate of interest r = 5 %

We have to find the amount after 3 year

We know that future value is given by $A=P(1+\frac{r}{100})^n$, here A is future value P is present value , r is rate of interest and n is time period

So $A=5000(1+\frac{5}{100})^3$

$A=5000\times 1.05^3$

$A=5000\times1.1576=5788.125$

So the amount after 3 years will be $5788.125

Answer 2

The person would have $5788.125 for the trip in 3 years if you can invest this gift at 5% compounded annually.

What is the formula for calculating the future value of the investment?

$A=P(1+\frac{r}{100} )^{n}$

How to calculate the future value of the invenstmet?

$5000(1+\frac{5}{100})^{3} \\=5000*1.1576\\=5788.125$

Learn more about future value computation here:

https://brainly.com/question/14611711