Interest
An online savings account has a 2.4% interest rate per year. If you put in an initial investment of $5,000, how much money would be in the account 7 years from now?
Hint
The question is asking for the future worth,
$$F$$
, given the present value/worth,
$$P$$
.
Hint 2
Single Payment Compound Amount:
$$$F=P(1+i)^n$$$
where
$$i$$
is the interest rate per interest period, and
$$n$$
is the number of compounding periods.
The question is asking for the future worth,
$$F$$
, given the present value/worth (initial principal balance),
$$P$$
. Single Payment Compound Amount:
$$$F=P(1+i)^n$$$
where
$$i$$
is the interest rate per interest period, and
$$n$$
is the number of compounding periods.
$$$F=\$5,000(1+.024)^{7}=\$5,000(1.024)^{7}=\$5,903$$$
~$5,900