Chapter1: Understanding Personal Finance
Section1.4: Perform Time Value Of Money Calculations
Problem 3CC
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What is the future value (FV) of $50,000 in six years, assuming the interest rate is 4% per year?
A. $53,776
B. $56,939
C. $32,500
D. $63,266](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3966b9a7-fe71-44cf-b953-e8752bb97164%2Ffdaf6790-4752-4264-bb02-92cc82625018%2Fl38pwjq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ques
What is the future value (FV) of $50,000 in six years, assuming the interest rate is 4% per year?
A. $53,776
B. $56,939
C. $32,500
D. $63,266
Expert Solution
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Step 1
The value of amount available at current date on the specific date in future when invested at constant interest rate is called future value(FV). It is ascertained by compounding of the amount as $50,000 over 6 years using 4% interest rate.
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