Question

Suppose that when your friend was born, your friends parents deposited $2000 in an account paying 5.9% interest. What will the account balance be after 15 years?

Answer 1

FV= $4,725.74

Explanation:

Giving the following information:

Initial investment (PV)= $2,000

Number of periods (n)= 15 years

Interest rate (i)= 5.9% = 0.059

To calculate the Future Value, we need to use the following formula:

FV= PV*(1 + i)^n

FV= 2,000*(1.059^15)

FV= $4,725.74