Michael J.

asked • 06/12/16

Invest $1 today (PV) at 10% (i) compounded annually for 5 years (n). Find future value FV:

The formula to calculate the value of $1 put into savings today is fv = pv*((1+i)^n). The variables are fv = future value, pv = present value, i = interest rate per period, and n = the number of periods. In the formula, n is an exponent. What does the exponent in this case state that you need to do mathematically to the (1 + i) segment of the formula? Select an interest rate and number of periods—be sure your numbers are different from other students who already answered this question—to calculate the future value of $1. How much money would you have at the end of the period you determined if you invested $1 today (pv)?

Mark M.

What values did the other students use?
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06/12/16

Michael J.

Hello Mark,
 
I decide to pick this one as my problem : Invest $1 today (PV) at 10% (i) compounded annually for 5 years (n). Find future value FV:
 
No students have picked this problem ;)
 
Hope this helps
 
Can you help me with this problem and show how you got the answer 
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06/12/16

Mark M.

FV = PV(1 + r)t              formula for compounded interest
FV = 1(1 + 0.1)5           substitute values
FV = 1(1.1)5                 combine like terms
FV = 1.61051               raise to power
 
 
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06/12/16

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