Question

In: Economics

4. Find the value twenty years from now of a $10,000 deposit today at an annual...

4. Find the value twenty years from now of a $10,000 deposit today at an annual interest rate of 0.1% per year if the interest on the account compounds daily.

Solutions

Expert Solution

If this interest is compunded annualy, the future value is

If it is compounded daily, we modify the equation by

Here, PV = 10,000, r = 0.1, and n= 20

Putting those value in the formula, we get

= 10,202.01 (approx)

Rahul Sunny answered 2 years ago
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