What is the formula you should use to determine a bank account's future value in one year?
A)Future value equals the present value plus the rate of interest.
B)Future value equals the present value minus the rate of interest.
C)Future value equals the present value multiplied by one plus the rate of interest in decimals.
D)Future value equals the present value divided by one plus the rate of interest in decimals.

Question

Quizplus · Accepted Answer

The formula for calculating the future value of a bank account after one year is FV = PV(1 + r), where PV is the present value, r is the interest rate expressed as a decimal, and FV is the future value after one year. So, the correct formula is future value equals the present value multiplied by one plus the rate of interest in decimals (Option C).

What Is the Formula You Should Use to Determine a Bank