If you put $2000 in a saving account that earns 3% interest per year,what is the formula you should use to determine the account's future value in one year?

Question

Quizplus · Accepted Answer

The formula for calculating future value with compound interest is FV = PV × (1 + r)n, where PV is the present value, r is the interest rate per period, and n is the number of periods. In this case, the present value is $2000, the interest rate is 3% (or 0.03), and the number of periods is 1 year. Plugging these values into the formula gives FV = $2000 × (1 + 0.03)^1, which simplifies to FV = $2060. Therefore, the correct formula to use is D: Future value = $2000 × (1 + 0.03).

If You Put $2000 in a Saving Account That Earns