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3 April, 09:01

Jim makes a deposit of $12,000 in a bank account. The deposit is to earn interest compounded annually at the rate of 6 percent for seven years.

a. How much will jim have on deposit at the end of seven years

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  1. 3 April, 12:16
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    To calculate the amount of money that Jim will have on the deposit in 7 years, we will have to calculate the future value of the deposited amount

    Future Value (FV) = PV * (1+r) ^n

    PV = 12,000

    r = 6% = 0.06

    n = 7 years = 7

    FV = 12000 * (1+0.06) ^7

    FV = 12000*1.06^7

    FV = 18,043.56

    a. How much will jim have on deposit at the end of seven years - $18,043.56
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