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2 years ago

Harry just received $2,000 for graduation. He plans on investing this money for five years at 8%

1 answer:

5 0

Using either the future value tables or the financial calculator, the amount Harry will have in an ending balance is <u>$2,938.66</u>.

<h3>What is the future value?</h3>

The future value represents the compounded value of an investment using an interest rate for a period.

Compounding implies that both the principal and the accumulated interest continue to attract more interest.

The future value can be computed using the future value table or an online finance calculator as demonstrated below.

Data and Calculations:

N (# of periods) = 5 years

I/Y (Interest per year) = 8%

PV (Present Value) = $2,000

PMT (Periodic Payment) = $0

<u>Results</u>:

FV = $2,938.66 ($2,000 x 1.46933)

Future value factor of 8% for 5 years = 1.46933)

Total Interest = $938.66 ($2,938.66 - $2,000)

Thus, the amount Harry will have in an ending balance is <u>$2,938.66</u>.

Learn more about the future value at brainly.com/question/24703884

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