Suppose you had ₱100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? A. More than ₱102 B. Exactly ₱102 C. Less than ₱102
Suppose you had ₱100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? A. More than ₱102 B. Exactly ₱102 C. Less than ₱102
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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Suppose you had ₱100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?
A. More than ₱102
B. Exactly ₱102
C. Less than ₱102
Expert Solution
Step 1
Future Value refers to the compounded value of a single cash flow received today or multiple cash flows received at some equal interval of time, at a given growth rate for a specified period of time. It is an important technique or tool which plays a vital role for investors as they can determine the feasibility of the investment by finding out the return that an investment can be given at a required rate and for a given period of time.
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