Answer:
$517.50
Step-by-step explanation:
we have to use the future value formula:
future value = present value x (1 + interest rate)ⁿ
- present value = $450
- interest rate = 15%
- n = 1 year
future value = $450 x (1 + 15%) = $450 x 1.15 = $517.50
The basic premise of finances is that the value of money changes over time, i.e. one dollar today is worth more than one dollar tomorrow. That is because the money yo have today can be invested and it can interest, therefore, it will be worth more in the future.