Question

If a man saves 1000 each year and invests at the end of the year at 5% compound interest, how
much will the amount be at the end of 15 years?

(a) 21,478 (b) 21,578
(c) 22,578 (d) ` 22,478

Answer 1

Answer:

(b) 21,578

Step-by-step explanation:

fv(rate;nper;pmt;pv;type)

fv => future value of money

rate => effective rate or yield or CAGR

nper => number of periods (years in this case)

pmt => installment payment

pv => lump sum payment (or payment already present at beginning of calculation period)

type => 1 if pmt at beginning or 0 if pmt is end of period

Applying the values provided in the problem,

fv(5%;15;-1000;0;0) = 21,578.56

You will end up with 21,578.56 INR.