Mike Branson invested his summer earnings of $6000 in a savings account for college. The account pays 2.5% interest. How much will this amount to in 6 months? Mike's savings will amount to $ in 6 months. (Round to the nearest cent as needed.)
Mike Branson invested his summer earnings of $6000 in a savings account for college. The account pays 2.5% interest. How much will this amount to in 6 months? Mike's savings will amount to $ in 6 months. (Round to the nearest cent as needed.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Mike Branson invested his summer earnings of $6000 in a savings account for college. The account pays 2.5%
interest. How much will this amount to in 6 months?
Mike's savings will amount to $ in 6 months.
(Round to the nearest cent as needed.)
Expert Solution
Step 1
Future Value refers to the value of the current asset or investment or of cash flows at a specified interest rate for a specified period of time at some specified future date. It is an important concept of the time value of money which is very useful for everyone especially for investors as they can evaluate the worth of their investments or securities in the future and accordingly can take the decision of whether to invest or not.
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