Question

Limone's Lemonade Corp. Has a savings plan for its employees. If an employee makes an initial contribution of $1,000.00, the company pays 8% interest compounded quarterly. What is the value of the account after 5 years?

Answer 1

$1485.95

Explanation:

The formula to be used is :

FV = PV (1 + r/m)^mn

FV = Future value

PV = Present value

R = interest rate

N = number of years

m = number of compounding

1000x (1 + 0.08/4)^5x4 = $1485.95