Question

QUESTION 14

1. You are going to deposit $2700 in an account that pays 0.33 percent interest compounded monthly. How much will you have in 7 years?

   		$3572.59
   		$3549.12
   		$3560.84
   		$3543.46
   		$3564.40

Answer 1

The Future Value is calculated by using the following formula

Future Value = Amount Deposited x (1 + r)ⁿ

Where, “r” is the Interest Rate & “n” is the number of periods

Amount Deposited = $2,700

Interest Rate (r) = 0.33% per month

Number months (n) = 84 Months [7 Year x 12 Months]

Therefore, the Future Value = Amount Deposited x (1 + r)ⁿ

= $2,700 x (1 + 0.0033)⁸⁴

= $2,700 x 1.3188282

= $3,560.84

“Hence, the amount that you’ll have in 7 years would be $3560.84”