Question

Expected future value $125,000 3% of 2 years

Answer 1

$132,612.50

Explanation:

We will use the present value - future value formula. WHich is:

`FV=PV(1+r)^t`

Where

FV is the future value (amount)

PV is the present value (amount)

r is the rate of interest (per year)

t is the number of years

In the problem given, the present amount (PV) is 125,000. The rate of interest (r) is 3%, or 0.03. And the time frame is 2 years, or t = 2.

Plugging these info in the equation, we can get the future value as shown:

`FV=PV(1+r)^t\\FV=125,000(1+0.03)^2\\FV=125,000(1.03)^2\\FV=132,612.5`

This is the future vallue of $125,000 3% in 2 years.