What is the future value (FV) of 1000 euro compounded annually for 4 years at 4% APR.a.1169.85 eurob.None of them.c.1170.15 eurod.1069.25 euroe.1160.60 euro
Question
What is the future value (FV) of 1000 euro compounded annually for 4 years at 4% APR.a.1169.85 eurob.None of them.c.1170.15 eurod.1069.25 euroe.1160.60 euro
Solution
The correct answer is a. 1169.85 euro.
Here's the step-by-step calculation:
- The formula for future value (FV) is FV = PV * (1 + r)^n, where PV is the present value, r is the interest rate, and n is the number of periods.
- In this case, PV = 1000 euro, r = 4% or 0.04, and n = 4 years.
- Plugging these values into the formula gives FV = 1000 * (1 + 0.04)^4.
- Calculating this gives FV = 1000 * 1.16985.
- Therefore, the future value of 1000 euro compounded annually for 4 years at 4% APR is approximately 1169.85 euro.
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