In: Finance
Amount available in account = $21,000
- Calculating the Future Value after 5 years with Interest rate @2.9% compounded annually:-
where, Invested amount = $21,000
r = Interest rate = 2.9%
n= no of periods = 5
m = no of times compounding in a year = 1 ( compounded annually)
Future Value = $24,226.81
So, Future Value in 5 years with Interest rate @2.9% compounded annually
- Now, Calculating the Future Value after 5 years with Interest rate @4.3% compounded Quarterly:-
where, Invested amount = $21,000
r = Interest rate = 4.3%
n= no of periods = 5
m = no of times compounding in a year = 4 ( compounded Quarterly)
Future Value = $26,007.24
So, Future Value in 5 years with Interest rate @4.3% compounded Quarterly
Additional Interest earned = $26,007.24 - $24,226.81
= $1780.43
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