Question

What's the future value of $1,200 after 5 years if the appropriate interest rate is 6%, compounded monthly? a. $1,618.62 b. $1,537.69 c. $1,873.76 d. $1,699.55 e. $1,784.53

Answer 1

$1618.62

Step-by-step explanation:

The formula for calculating future value :

FV = P (1 + r/m)^nm

FV = Future value

P = Present value

R = interest rate

N = number of years

M = number of compounding = 12

$1,200(1 + 0.06 / 12 )^60 = $1618.62

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