Question

You are saving for a new car. If you start today with $2,000 in a savings account that pays 6% interest per year, put in an additional $500 at the end of year 2, how much will you have left at the end of year 3?

Answer 1

Step 1 :	Future value of $2000
	FV= PV*(1+r)^n
	Where,
	FV= Future Value
	PV = Present Value
	r = Interest rate
	n= periods in number
	= $2000*( 1+0.06)^3
	=2000*1.19102
	= $2382.03
Step 2 :	Future value of $500 deposited in year 2
	=$500*1.06
	=$530
Ste 3 :	Total avalable in year 3 =
	=$2382.03+530
	=$2912.03