Question

I plan on opening a savings account with $500 and leaving it in the account for 2 years. If the bank is going to pay me an interest rate of 3%, how much money will I have in the account at the end of 2 years?

Answer 1

Future Value= $530.45

Explanation:

Giving the following information:

Initial investment (PV) = $500

Number of periods (n) = 2 years

Interest rate (i)= 3% = 0.03

To calculate the future value (FV), we need to use the following formula:

FV= PV*(1+i)^n

FV= 500*(1.03^2)

Future Value= $530.45