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22 September, 19:20

Chris plans on saving $4,000 a year at 4 percent interest for five years. Which one of these is the correct formula for computing the future value at Year 5 of these savings

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  1. 22 September, 22:33
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    FV = $21,665.29

    Explanation:

    Giving the following information:

    Chris plans on saving $4,000 a year at 4 percent interest for five years.

    To calculate the future value, you need to use the following formula:

    FV = {A*[ (1+i) ^n-1]}/i

    A = annual deposit

    FV = {4,000*[ (1.04^5) - 1]} / 0.04

    FV = $21,665.29
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