Future value (with changing interest rates). Jose has \( \$ 8,000 \) to invest for a 3 -year period. He is looking at four different investment choices. What will be the value of his investment at the end of 3 years for each of the following potential investments? a. Bank CD at \( 4 \% \). b. Bond fund at \( 8 \% \). c. Mutual stock fund at \( 15 \% \). d. New venture stock at \( 22 \% \). b. What will be the value of Jose's bond fund investment that offers an annual rate of return of \( 8 \% \) for 3 years? \( \$ \) (Round to the nearest cent.)

To calculate the future value of Jose's investments, we can use the formula for future value: \[ FV = P \times (1 + r)^n \] where \( FV \) is the future value, \( P \) is the principal amount (initial investment), \( r \) is the annual interest rate (as a decimal), and \( n \) is the number of years. ### a. Future Value Calculations: 1. **Bank CD at \( 4\% \)**: \[ FV = 8000 \times (1 + 0.04)^3 = 8000 \times (1.124864) \approx \$8,998.91 \] 2. **Bond Fund at \( 8\% \)**: \[ FV = 8000 \times (1 + 0.08)^3 = 8000 \times (1.259712) \approx \$10,077.70 \] 3. **Mutual Stock Fund at \( 15\% \)**: \[ FV = 8000 \times (1 + 0.15)^3 = 8000 \times (1.520875) \approx \$12,166.99 \] 4. **New Venture Stock at \( 22\% \)**: \[ FV = 8000 \times (1 + 0.22)^3 = 8000 \times (1.815504) \approx \$14,524.03 \] ### b. Value of Jose's Bond Fund Investment: The value of Jose's bond fund investment that offers an annual rate of return of \( 8\% \) for 3 years is approximately: \[ \text{Bond Fund Future Value} = \$10,077.70 \]