Salem Co. has a year-end of December 31 and they are evaluating the cash flows of some potential investments/projects they are considering for their next fiscal year, starting January 1.

Salem is considering investing some of their current cash starting on Jan 1 in order to use the proceeds in a few years to purchase a new van that they will need to use in their daily business operations.

If they want to invest a $30,000 lump sum on Jan 1, compounded annually at an interest rate of at 6% for 4 years, how much will they have at the end of the 4 years to purchase the van?

Answer rating: 100% (QA)

To calculate the future value of a lump sum investment compounde... View the full answer