Question:
What is the future value in 2 years of $100 today at an interest rate of 10 percent?
Future Value:
In the context of finance, an amount invested today in a financial asset grows throughout the investment on the basis of the relevant interest rate, frequency of compounding, and time remaining until maturity. The future value of the investment is based on the before-mentioned factors.
Answer and Explanation:1
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The calculated future value of the investment in 2 years is $121.
The future value of the investment after 2 years is given by:
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Future Value Definition Formula & Examples
from
Chapter 5/ Lesson 16
40K
Understand the definition of future value and the future value formula. Explore some examples that show how to calculate the future value of an investment.
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