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?

Answer 1

Pt = Po (r + 1)^n.

Pt = Principal @ time t(2 mo.).

Po = Initial investment(420).

r = APR / 12 = 3% / 12 = 0.25 % = 0.0025 = rate / mo.

n = 12 comp. / yr * (1/6) yr = 2 comp
in 2 mo.

Pt = 420 (1.0025)^2 = 422.10.