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Oriole Company will invest $820,000 today. The investment will earn 7% for 7 years, with no funds...

Question:

Oriole Company will invest $820,000 today. The investment will earn 7% for 7 years, with no funds withdrawn. In 7 years, the amount in the investment fund is

a) $820,000.00

b) $1,318,767.00

c) $1,221,800.00

d) $1,316,740.00.

Investment:

Investment is an asset paid today in the hopes of the possibility that it will earn future income or can be sold for higher price in the future. One example of possible future income earned is interest.

Answer and Explanation:

The answer is d) $1,316,740.00.

Given:

Investment = $820,000

Interest Rate = 7%

Period = 7 years

Computation:

Future Value of Investment = Investment x {( 1 + Interest Rate) ^ 7


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