19. The present value of the money in your savings account is $420, and you're receiving 3% annual interest compounded monthly. What is the future value in two months?

Question

A. $422.10

B. $432.60

C. $424.11

D. $426

Answer 1

V = Vo(1+r)^n.

Vo = $420.

r = 0.03/12 = 0.0025/mo.

n = 1Comp/mo. * 2mo. = 2 compounding periods.

V = ?.