Question

You estimate that you can save $3,450 by selling your home yourself rather than using a real estate agent. What would be the future value of that amount if invested for five years at 3 percent?

Answer 1

The future value of $3,450 invested for five years at 3% interest would be approximately $3,995.04.

Step-by-step explanation:

To calculate the future value of an investment, we can use the formula:

FV = PV * (1 + r)^n

Where:

• FV is the future value
• PV is the present value
• r is the interest rate per period
• n is the number of periods

In this case, the present value (PV) is $3,450, the interest rate (r) is 3%, and the number of periods (n) is 5 years. Plugging these values into the formula gives us:

FV = 3450 * (1 + 0.03)^5 = 3450 * 1.159274 = $3,995.04

Therefore, the future value of $3,450 invested for five years at 3% interest would be approximately $3,995.04.