Future Value Compute the future value in year 4 of a $500 deposit in year 1 and another $1,000 deposit at the end of year 3 using a 5% interest rate.

Question

Quizplus · Accepted Answer

The future value of the $500 deposit after 4 years is $500 * (1 + 0.05)^(4-1) = $578.81. The future value of the $1,000 deposit after 1 year is $1,000 * (1 + 0.05)^(4-3) = $1,050. Adding these gives $578.81 + $1,050 = $1,628.81.

Future Value Compute the Future Value in Year 4 of a $500