A deposit of $870 earns interest rates of 10.7 percent in the first year and 8.7 percent in the second year. What would be the second year future value?

Question

asked Apr 27, 2021 28.4k views

1 Answer

Saud · Answer 1 · 2021-05-02T14:06:53+0000

Answer:

Year2= $1,046.88

Step-by-step explanation:

Giving the following information:

A deposit of $870 earns interest rates of 10.7 percent in the first year and 8.7 percent in the second year.

We need to use the following formula:

FV= PV*(1+i)^n

Year1= 870*1.107= 963.09

Year2= 963.09*1.087= 1,046.88