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Suppose that you invest $100 today in a risk-free investment with an annual compounding interest rate of 4%. What will be the value of your investment in 4 years?
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Suppose that you invest $100 today in a risk-free investment with an annual compounding interest rate of 4%. What will be the value of your investment in 4 years?

User Sania
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1 Answer

6 votes

Answer:

Value of investment = $117

Step-by-step explanation:

Given:

P = $100

r= 4% = 0.04

n = 4 years

Computation:

A = P(1+r)ⁿ

A = 100(1+0.04)⁴

A = 100(1.04)⁴

A = 116.9858

A = $117

Value of investment = $117

User Axois
by
5.7k points
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