2. Suppose, you have deposited $1000 in your Arvest bank account at 4% nominal interest rate....

Question

Question

business economics

Answer 1

Answer #1

ANSWER:

PV = $1,000

I = 4%

N = 5 YEARS

FV = PV * (1 + I) ^ N

FV = 1,000 * (1 + 4%) ^ 5

FV = 1,000 * (1.04) ^ 5

FV = 1,000 * 1.2166

FV = 1,216.653

SO THE FUTURE VALUE IS $1,216.65

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Answer 2

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