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If Mrs Glam moved her clothes shop, she would finance the move with a small legacy
of $10,000 that she has been left. She is wondering whether instead of moving the
shop now,she should invest the money she has been left and use the lump sum in four
years time to move to even bigger premises.
Required:
Calculate the value of the legacy in four years time, if it is invested at a compound
interest rate of 10%.i don’t understand why they solve it like that
$10,000 × 1.14 = $14,641
shouldn’t i use Annuity table for 10% 4 year ?I do not know who ‘this’ is, but either you have misread the answer or they have mistyped it.
In four years time there will be 4 years interest to be added, and so the amount will have grown to 10,000 x 1.1^4 = 14,641
There is no annuity. An annuity is an equal amount each year and that is not the case here.
Have you watched the free lectures on interest and on discounting?
thank you sir
its part from kaplan question part B ,
i watched your lectures on interest and on discounting , i understood it very well from you explanation but when want to solve questions i get confused little bitthank you so much tomorrow my exam, wish me good luck ^^
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