Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 20PROB
Related questions
Question
How much would Roderick have after 5 years if he has $400 now and leaves it invested at 5.7% with annual compounding?
Group of answer choices
$580.53
$474.98
$527.76
$501.37
$606.92
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
Time value of money means that the value of money received in the present will have more value than the value of the money received in the future. It is based on the concept that the earlier receipts will b worth more than the later receipts. The process of finding the future value with the present value, number of compounding period and the interest rate is called compounding.
Where,
FV = Future value
PV = Present value
r = Interest rate
n = Number of compounding period
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![EBK CFIN](https://www.bartleby.com/isbn_cover_images/9781337671743/9781337671743_smallCoverImage.jpg)
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![EBK CFIN](https://www.bartleby.com/isbn_cover_images/9781337671743/9781337671743_smallCoverImage.jpg)
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![PFIN (with PFIN Online, 1 term (6 months) Printed…](https://www.bartleby.com/isbn_cover_images/9781337117005/9781337117005_smallCoverImage.gif)
PFIN (with PFIN Online, 1 term (6 months) Printed…
Finance
ISBN:
9781337117005
Author:
Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:
Cengage Learning