Compute the Future Value in Year 12 of a $2,000

question 47

Multiple Choice

Compute the future value in year 12 of a $2,000 deposit in year 3 and another $4,000 deposit at the end of year 5 using a 10% interest rate.

• A) $12,510.77
• B) $12,909.81
• C) $13,4067.31
• D) $15,007.52

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Definitions:

Fair Value

Fair Value is the estimated market price of an asset or liability, reflecting what a willing buyer would pay a willing seller in an arm's length transaction.

Nonmonetary Productive Assets

Physical or tangible assets that do not have a fixed monetary value but contribute to the production capacity of a business.

Boot

Additional cash or property added to an exchange or trade to make the value of the traded goods equal, commonly used in real estate and barter transactions.

Gain

An increase in wealth or resources, often resulting from a favorable difference between the purchase price and the selling price of assets.