Question

Suppose that $575.75 is invested in a savings account with an APR of 12% compounded monthly. What is the future value of the account in 5 years?

Answer 1

FV= $1,045.96

Explanation:

Giving the following information:

Initial investment (PV)= $575.75

Number of periods (n)= 15*5= 60 months

Interest rate (i)= 0.12 / 12= 0.01

To calculate the future value (FV), we need to use the following formula:

FV= PV*(1+i)^n

FV= 575.75*(1.01^60)

FV= $1,045.96