Question

You deposit $10,000 in a savings account where the interest rate is 3% compounded annually. At the beginning

of the 6th year, the bank raises its interest rate to 3.5%. How much will you have accumulated after 15 years?

Answer 1

Step 1 :	Future value at the end of year 5
	FV= PV*(1+r)^n
	Where,
	FV= Future Value
	PV = Present Value
	r = Interest rate
	n= periods in number
	= $10000*( 1+0.03)^5
	=10000*1.15927
	= $11592.74
Step 2 :	Value at theend of year 15
	FV= PV*(1+r)^n
	Where,
	FV= Future Value
	PV = Present Value
	r = Interest rate
	n= periods in number
	= $11592.74*( 1+0.035)^10
	=11592.74*1.4106
	= $16352.7