Question

Congratulations! You were the 10th caller on the KMTH morning show and you just won $4,000.00. After you calm down, you decide to put the money into a bank account so that you will have even more money for a trip to Europe. Snurling Bank tells you that they will pay 7% per year compounded monthly. How much money will you have for your trip in 7 years

Answer 1

$6,519.98

Step-by-step explanation:

According to the scenario, computation of the given data are as follows:

Present value = $4,000

Rate = 7%

Rate compounded monthly = 7% ÷ 12

Time period = 7 × 12 = 84

So, we can calculate the future value by using financial calculator.

The attachment is attached below:

FV = $6,519.98