Question

If the present value of an investment is $500 and the interest rate is 6%, how much will the investment be worth in 12 years?

Answer 1

Answer:

Amount after 12 year will be 1006.098

Explanation:

We have given present value of the investment, that is present value P = $500

Rate of interest r = 6 %

Time period is given n = 12 years

We have to fond the total investment after 12 years

Future value is given by

$A=P(1+\frac{r}{100})^n$, here A is future value P is principal amount r is rate of interest and n is time period

So future value will be equal to

$A=500\times (1+\frac{6}{100})^{12}$

$A=500\times1.06^{12}$

$A=500\times2.012=1006.098$

So amount after 12 years will be $1006.098