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calculate the future value in three years of $5,000 invested today, given an annual interest rate of 6%. (assume annual compounding)

User Evk
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Final answer:

The future value of $5,000 invested today with an annual interest rate of 6% for three years is approximately $5,955.08.

Step-by-step explanation:

To calculate the future value of $5,000 invested today with an annual interest rate of 6% (assuming annual compounding), you can use the formula for compound interest.

Future Value = Principal × (1 + interest rate)time

Plugging in the values:

Principal = $5,000, interest rate = 0.06, time = 3 years

Future Value = $5,000 × (1 + 0.06)3

Simplifying the calculation:

Future Value = $5,000 × (1.06)3 = $5,000 × 1.191016 = $5,955.08

So, the future value of $5,000 invested today for three years with an annual interest rate of 6% is approximately $5,955.08.

User Charlesdg
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