Question

8. What is the future value of an imvestment of $10,000 with an interest rate of 6% per year, compounded daily (365 days), for 9 years.

Answer 1

Here we will use the following formula:

FV = PV * (1 + r%)ⁿ

where, FV = Future value, PV = Present value = $10000, r = rate of interest = 6% compounded daily, so daily rate = 0.01643835616 %, n= time period = 9 * 365= 3285 days

now, putting theses values in the above equation, we get,

FV = $10000 * (1 + 0.01643835616%)³²⁸⁵

FV = $10000 * (1.01643835616)³²⁸⁵

FV = $10000 * (1.01643835616)³²⁸⁵

FV = $10000 * 1.715931

FV = $17159.31

So, future value is $17159.31