If $2000 is invested at 10 per cent at the start of every year for three years, how much will you have accumulated at the end of the three years?

Question

Quizplus · Accepted Answer

This is a problem involving the future value of a series of annuities. The formula to calculate the future value of an annuity is $FV = P \times \frac{((1 + r)^n - 1)}{r}$, where P is the payment amount, r is the interest rate per period, and n is the number of periods. Here, P = $2000, r = 0.10 (10%), and n = 3. Plugging these values into the formula gives $FV = 2000 \times \frac{((1 + 0.10)^3 - 1)}{0.10}$ = $6620.

If $2000 Is Invested at 10 Per Cent at the Start