Suppose you have $100 that you want to deposit in the bank (today), and you can...
Suppose you have $100 that you want to deposit in the bank (today), and you can earn a 5% annual interest rate (compounded annually) - after one yr. you will have?
Homework Answers
Answer
FV=PV*(1+i)^n
FV=future value=?
PV=present value =100
i=interest rate =5%
n=years=1
FV=100*(1.05^1)
=105
the amount is $105
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