Future-Value Calculations - Example 3 Dan starts an investment plan with his advisor. This plan will prepare Dan to come up with a down payment for his first home in 3 years. His advisor promises him that this investment will yield a rate of return of 5% per year. Assuming Dan can invest $100,000 today, and at the end of the first year he will be able to invest an additional $10K, and at the end of the second year he will be able to invest an additional $12K, how much will Dan have at the end of the third year? $100,000 x (1+5%) ^3 = $115,762.5 $10,000 x (1+5%)^2 = 11025 $12,000 x(1+5%)^1 = 12600 Sum of three parts = $139,387.5