Faculty Comment

"Stephanie, the calculations of the future value of $450 at the end of the third year are incorrect! Please refer to Weaver and Weston (2001), Chapter 3, Future Value for a refresher and examples on future value using compounded interest, then revise the calculations, keeping in mind that the interest is compounded annually. " I have read and read and looked up references online and I keep coming up with the same answer. HELP ME PLEASE!!!!

Here is what I submitted:

A $450 deposit earns 6 percent interest in the first year, 3 percent interest in the second year, and 7 percent interest in the third year. What is the future value at the end of the third year?

FV=PV * (1+i) (1+j) (1+k)

=450 * (1+0.06) (1+0.03) (1+0.07)

=450* 1.06* 1.03* 1.07

=$525.70