Math Problem Statement
- Home Renovation Fund Sarah is saving $40,000 to renovate her home. She plans to invest this money in an account with a 6% interest rate compounded annually for the next 5 years. How much money will Sarah have after 5 years to complete her home renovation?
FV=PV(1.00+I)n, where:
FV = Future Value PV = Present Value I = Interest rate (as a decimal) n = Number of periods
Step-by-Step Solution: Write the formula: Add the interest rate to 1:FV= Calculate: Multiply the result by the present value Final Answer: The future value of Sarah’s account after 5 years will be $
Solution
Ask a new question for Free
By Image
Drop file here or Click Here to upload
Math Problem Analysis
Mathematical Concepts
Compound Interest
Exponential Growth
Formulas
Future Value formula FV = PV * (1 + I)^n
Theorems
Compound Interest Theorem
Suitable Grade Level
Grades 9-12
Related Recommendation
Compound Interest Calculation for $40,000 with 4.75% Interest Rate Compounded Daily
Compound Interest Calculation for $5000 Investment Over 10 Years at 6.5% Interest
Future Value Calculation of $400 Invested for 2 Years at 5% Compound Interest
Calculate Future Value of Investment with 1% Annual Interest for 14 Years
Future Value of $400 Annuity Over 15 Years at 6% Interest