Question

Jennifer invests $2,024 in a savings account with a fixed annual interest rate of %4 compounded 6 times per year. What will the account balance be after 8 years?

Answer 1

FV= $2,788.78

Explanation:

Giving the following information:

Initial investment (PV)= $2,024

Interest rate (i)= 0.04/6= 0.0067

Number of periods (n)= 8*6= 48

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

FV= PV*(1 + i)^n

FV= 2,024*(1.0067^48)

FV= $2,788.78