Question

If Birr 5000 is invested with a compound interest rate of 4 percent per annum, which of the following is the amount of the future value at the end of a 24th month?

a.
5203.02005 Birr

b.
5634.6205 Birr

c.
5365 Birr

d.
5408 Birr

Answer 1

d. 5408 Birr.

Explanation:

24 months = 2 years.

Amount after 2 years = 5000(1 + 0.04)^2

= 5408.