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 $$ 22 \% $$. a. What will be the value of Jose's bank CD investment that offers an annual rate of return of $$ 4 \% $$ for 3 years? $$ \$ \square $$ (Round to the nearest cent.)

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To calculate the future value of Jose's **Bank CD** investment with an annual interest rate of **4%** over **3 years**, we can use the **Future Value (FV)** formula for compound interest:

$$
FV = P \times (1 + r)^t
$$

Where:
- $$ P $$ = Principal amount (\$8,000)
- $$ r $$ = Annual interest rate (4% or 0.04)
- $$ t $$ = Number of years (3)

**Step-by-Step Calculation:**

1. **Calculate the growth factor:**
   $$
   (1 + r)^t = (1 + 0.04)^3 = 1.04^3 = 1.124864
   $$

2. **Calculate the future value:**
   $$
   FV = 8,000 \times 1.124864 = 8,998.912
   $$

3. **Round to the nearest cent:**
   $$
   FV \approx \$8,998.91
   $$

**Final Answer:**
   
a. The value of Jose's bank CD investment after 3 years is **\$8,998.91**.
The value of Jose's bank CD investment after 3 years is \$8,998.91.

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