If Scott earns a 12% after-tax rate of return,$15,000 today would be worth how much to Scott in 2 years? Future value of $1.(Round present and future value factor(s)to 5 decimal places.)

Question

Quizplus · Accepted Answer

To calculate the future value of Scott's money, we need to use the formula:

FV = PV x (1 + r)^n

where PV is the present value, r is the after-tax rate of return, and n is the number of years.

In this case, PV = $15,000, r = 12%, and n = 2.

First, we need to calculate the future value factor:

FVF = (1 + r)^n
FVF = (1 + 0.12)^2
FVF = 1.2544

Next, we can calculate the future value:

FV = PV x FVF
FV = $15,000 x 1.2544
FV = $18,816

Therefore, $15,000 today would be worth $18,816 to Scott in 2 years. The answer is D.

If Scott Earns a 12% After-Tax Rate of Return,$15,000 Today