Question

Using the formula, determine how much money you would have if you put 1,000 in the bank at an interest rate of 7% and kept it
there for 5 years.
Answer
Using the formula, determine how much money you need to put into the bank to have $1,500 in 4 years if the interest rate is 5%.
Answer
Using the calculator answer the following questions.
How much money would you have in the bank if you deposited $50 at an interest rate of 4%, after 6 years?
Answer
In order to have $1,000 in the bank in 6 years, if your interest rate is 6%, how much money do you have to deposit today?
Answer
If you deposited $1,500 in the bank 5 years ago and today you have $1,875, what interest rate did you receive?
Answer
How many years would it take for your bank account to grow from $750 to $1,250 if you received an interest rate of 5%?
Answer

Answer 1

Question 1

How much money would be accumulated with 1,000 in the bank at an interest rate of 7% for 5 years can be calculated with help of below formula-

FV = PV ( 1 + r )ⁿ

where,

FV = future value

PV = present value

r = rate of interest

n = no. of years

Here,

PV = $ 1000 , r = 7 % and n = 5 years

FV = 1000 ( 1 + 0.07)⁵

= 1000 ( 1.07)⁵

= 1000 * 1.4025517307

FV = 1402.55 $ (approx)

Question 2

How much money needed to be put in bank to have $1,500 in 4 years at interest rate is 5% can be calculated with help of below formula-

FV = PV ( 1 + r )ⁿ

where,

FV = future value (ending amount)

PV = present value

r = rate of interest

n = no. of years

Here,

FV = $ 1500 , r = 5 % and n = 4 years

1500 = PV ( 1 + 0.05)⁴

1500 = PV ( 1.05)⁴

1500 = PV * 1.21550625

PV = 1500 / 1.21550625

PV = 1234.05 $ (approx)

Amount to be put today = 1234.05 $ (approx)

Hope it helps!