Georgina invested $20000 in an account which paid 6.2% p.a. interest, compounded monthly for 3 years. Inflation averaged 1.8% per year over this time.
a Calculate the future value of the investment.
b Find the real value of the investment.
Answers
Given : Georgina invested $20000 in an account which paid 6.2% p.a. interest, compounded monthly for 3 years.
Inflation averaged 1.8% per year over this time.
To Find : a Calculate the future value of the investment.
b Find the real value of the investment.
Solution :
Georgina invested $20000 in an account which paid 6.2% p.a. interest, compounded monthly for 3 years.
P = $20000
R = 6.2% p.a = 6.2/12 per month
n = 3 years = 36 months
A = P(1 + R/100)ⁿ
=> A = 20000( 1 + 6.2/1200)³⁶
=> A ≈ 24,077
real value of the investment. = 24,076.9
Inflation averaged 1.8% per year over this time.
=> 100(1 + 1.8/100)³ = 105.5
105.5 has Value 100
1 has Value 100/105.5
=> 24,077 has Value ≈ 22822
future value of the investment. ≈ 22822
Learn More:
The table below shows the future value of a certificate of deposit(cd ...
https://brainly.in/question/30722096
an account paying interest 6% per year compoundeamonthly. What ...
https://brainly.in/question/13148870