Question

How much will $20,000 invested today at 3 percent interest be worth in 5 years if it is compounded annually? How much will it be worth in 5 years if compounded monthly?

Value Today-

Rate-

Number of years-

Months per year-

Compounding periods-

Rate per quarter-

Annual FV-

Monthly FV-

Answer 1

A = where, ----- - P(1+0 ho)" A= Furore value Present value = rate of Interest n = time period today = value Rate No. of $20,000 - 34 5 years = At 3% Annual compounding 1: 20,000 Cities 5 = 20,000 (1 +0.03) 5 2 20,000 X 1.1593 a $ 23,185 - AZ 3% monthly compounding A= 20,000 (it / 100) 12X5 20,000++ 0.0025). ° = 20,000 71.0025] & X 1616 - 20,000 $ 23,232