Question

The present value in a savings account is $420. It is receiving 3% annually compounded monthly. What is the future value in 2 months?

Answer 1

$422.10

Explanation:

According to the scenario, computation of the given data are as follows,

Present value (PV) = $420

Rate of interest( compounded monthly) = 3% annually

so, rate of interest per month (r) = 3 ÷ 12 = 0.25% per month

Time period (n) = 2 months

so, by putting the value in excel FV formula, we get.

Attachment is attached below.

Future value in 2 months = $422.10