Answer:
$1,213,657.685
Explanation:
For computation of compounded future value first we need to find out the present worth which is shown below:-
[tex]Present\ worth = Initial\ amount\ of\ investment\times \frac{(1 - (1 + g)^n \times (1 + i)^{-n}}{i - g}[/tex]
[tex]= \$2,250\times (\frac{(1 - (1 + 0.04)^{45}\times (1 + 0.06)^{-45}}{0.06 - 0.04})\\\\ = \$2,250 \times \frac{1-0.216245988}{0.02}[/tex]
= $88,172.32636
Now, Future value = Present worth × (1 + interest rate)^number of years
= $88,172.32636 × (1 + 6%)^45
= $1,213,657.685
Therefore we have applied the above formula to determine the future value.