Question

Find the future value, using the future value formula and a calculator. (Round your answer to the nearest cent.)$261,000 at 8.64% compounded daily for 30 years

Answer 1

Answer;

The future value is;

`A\text{ = \$3,484,966.40}`

Explanation;

To calculate the future value, we shall be using the formula below;

`A\text{ = P ( 1 + }(r)/(n))^(nt)`

where A is the future value that we want to calculate

P is the initial value which is $261,000

r is the interest rate which is 8.64 % = 8.64/100 = 0.0864

n is the number of times per year we will be compunding

Since it is daily, it means n will be 365 days

t is the number of years which is 30

Now, we proceed to substitute these values into the formula

`\begin{gathered} A\text{ = 261,000(1 + }(0.0864)/(365))^(30*365) \\ \\ A\text{ = \$3,484,966.40} \end{gathered}`