Question

STEP BY STEP PLEASE

2. What will $225,000 grow to be in 9 years if it is invested today in an account with an annual interest rate of 6%?

Answer 1

2. the amount of interest credited in 1st year is = 6% * $2,25,000 = $13,500

the amount at the end of 1st year is = $23,8500 (13,500 + $225,000)

the amount eligible for interest in the 2nd year is = $23,8500

the interest amount is = $14310

the amount deposited at the end of 2nd year is = $25,2810

the interest for the 3rd year is = $15,168.6

the amount at the end of the 3rd year is = $267978.6

the interest for the 4th year is = $16078.7

the amount at the end of 4th year is = $28,4057.3

the interest for the 5th year is = 17043.4

the amount at the end of 5th year is = $301100.7

the interest for the 6th year is = $18066

the amount at the end of 6th year is = $31,9166.7

the interest for the 7th year is = $19150

the amount at the end of 7th year is = $338,316.7

the interest for the 8th year is = $20299

the amount at the end of 8th year is = $358,615.7

the interest for the 9th year is = $21516.9

the amont at the end of 9th year is = $380132.6

we also calculate with the help of formula

FV = PV (1+R)^N

PV = $225,000

N = 9 YEARS

FV = 225,000(1+0.06)^9

= $380132.76