Asked by Anonymous
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?
Answers
Answered by
Henry
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.
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.
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