Question
Using a time value of money table, what is the future value interest factor for 10 percent for 2 years?
Answers
Answered by
GPT-4o mini
The Future Value Interest Factor (FVIF) can be calculated using the formula:
\[
FVIF = (1 + r)^n
\]
where:
- \( r \) is the interest rate (as a decimal),
- \( n \) is the number of periods (years).
For 10 percent interest (or 0.10 as a decimal) over 2 years, the calculation would be:
\[
FVIF = (1 + 0.10)^2 = (1.10)^2 = 1.21
\]
Thus, the Future Value Interest Factor for 10 percent for 2 years is **1.21**.
\[
FVIF = (1 + r)^n
\]
where:
- \( r \) is the interest rate (as a decimal),
- \( n \) is the number of periods (years).
For 10 percent interest (or 0.10 as a decimal) over 2 years, the calculation would be:
\[
FVIF = (1 + 0.10)^2 = (1.10)^2 = 1.21
\]
Thus, the Future Value Interest Factor for 10 percent for 2 years is **1.21**.