In: Finance
if you invest $20 in a savings account tha pays 5% interest how much money will you have in 4 years if you make no additional deposits
A/c balance after 4 years | PV×(1+r)^n | |
Here, | ||
A | Interest rate per annum | 5% |
B | Number of years | 4 |
C | Number of compoundings per per annum | 1 |
A÷C | Interest rate per period ( r) | 5.0% |
B×C | Number of periods (n) | 4 |
Present value (PV) | $ 20 | |
A/c balance after 4 years | $ 24.31 | |
20×(1+5%)^4 |