Question

If the present value of an investment is $500 and the interest rate is 6%, how much will the investment be worth in 12 years?

Answer 1

Amount after 12 year will be 1006.098

Step-by-step explanation:

We have given present value of the investment, that is present value P = $500

Rate of interest r = 6 %

Time period is given n = 12 years

We have to fond the total investment after 12 years

Future value is given by

`A=P(1+(r)/(100))^n`, here A is future value P is principal amount r is rate of interest and n is time period

So future value will be equal to

`A=500* (1+(6)/(100))^(12)`

`A=500*1.06^(12)`

`A=500*2.012=1006.098`

So amount after 12 years will be $1006.098