Question

You invest $50 in a bank account for 5 years, with interest compounded monthly. How much will you have at the end? compute the future values for interest rates of 0% to 10%, in 1% increments. Which of the following accurately displays these calculations? how would you solve in calculator

Answer 1

Since the rates are annual and compounding is monthly, we will calculate the rates as monthly (by dividing annual rate by 12) and time as monthly

Using financial calculator:

N=5*12=60

PV=-50

PMT=0, since you do not invest any amount periodically

1) I/Y=0%, FV=$50

2) I/Y=1%/12, FV=$52.56

3) I/Y=2%/12, FV=$55.25

4) I/Y=3%/12, FV=$58.08

5) I/Y=4%/12, FV=$61.05

6) I/Y=5%/12, FV=$64.17

7) I/Y=6%/12, FV=$67.44

8) I/Y=7%/12, FV=$70.88

9) I/Y=8%/12, FV=$74.49

10) I/Y=9%/12, FV=$78.28

11) I/Y=10%/12, FV=$82.27

for question: Which of the following accurately displays these calculations? Provide the options and leave a comment, will try to answer ASAP