You have $2,000 in an account which pays 5% annual interest.
How much additional dollars of interest would you earn over 6 years if you moved the money to an account earning 6%
Ans $ 156.85
FV = | Future Value |
PV = | Present Value |
r = | rate of interest |
n= | no of period |
At 5% | |
FV = | PV (1 + r )n |
FV = | 2000*(1+5%)^6 |
FV = | 2680.19 |
At 6% | |
FV = | PV (1 + r )n |
FV = | 2000*(1+6%)^6 |
FV = | 2837.04 |
Additional Interest = | 2837.04 - 2680.19 |
156.85 |
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