Question

What's the future value of $1,300 after 5 years if the appropriate interest rate is 6%, compounded monthly

Answer 1

the Future value is $1,753.51

Step-by-step explanation:

The computation of the future value is shown below;

Future value = Principal × (1 + rate of interest)^number of years

where,

Intersest rate per month = 6% ÷12 = 0.5%

And, the number of months is = 5 × 12 = 60

So,

= $1,300 × (1 + 0.005)^60

= $1,300 × (1.005)^60

= $1,300 × (1.3489)

= $1,753.51

Hence, the Future value is $1,753.51