Question

joseph has 10,000 to invest he invests in met bankpays 4 interest compounded annually how much money will he have in 4 years hint A=P(1+r)t)

Answer 1

FV = $11,698.59

Explanation:

Given,

Initial investment or principal or Present value, PV= $10,000

Interest rate (i) = 4%

No.of period (years, t) = 4

Since the interest rate is compounded annually, we have to use future value of compound formula instead of using simple interest formula.

Therefore, we know,

FV = PV (1 + i) ^ t

Putting the value,

FV = $10,000 (1 + 0.04)^4

We can separately calculate the factor, 1.04^4.

FV = $10,000*1.16985856

We can also use financial calculator to find the factor. However, we just use a normal scientific calculator to determine this.

FV = $11,698.59