document.write( "Question 1136312: In five years, the company plans to undertake a major upgrade to its servers and other IT infrastructure. Management estimates that it will need up to $450,000 to cover all related costs; however, as a fairly young company, the goal is to pay for the upgrade with cash and not to take out loans. Right now, you have $300,000 in a bank account established for Capital Investments. This account pays 4% interest, compounded annually. A member of the finance department has approached you with an investment opportunity for the $300,000 that covers a five-year period and has the following projected after-tax cash flows:
\n" ); document.write( " Year 1 Year 2 Year 3 Year 4 Year 5
\n" ); document.write( "90,000 115,000 135,000 110,000 90,000\r
\n" ); document.write( "\n" ); document.write( "How much money will be in the bank account if you leave the $300,000 alone (earning 4% compounded
\n" ); document.write( "interest) until you need it in five years? \n" ); document.write( "

Algebra.Com's Answer #754063 by Theo(13342) $\"\"$ $\"About$

You can put this solution on YOUR website!
if you leave the 300,000 in a bank account that pays 4% interest, compounded annually, you will have 300,000 * 1.04 ^ 5 = 364,995.87 in the account at the end of the 5 year investment period.\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( " \n" ); document.write( "

\n" );