SOLUTION: Using the future value calculation, determine at an interest rate of 3%, what would be your total balance available at the end of five years if you leave the $5,000 untouched. Show

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Question 1088931: Using the future value calculation, determine at an interest rate of 3%, what would be your total balance available at the end of five years if you leave the $5,000 untouched. Show your calculations, as well as, your answer in your portfolio.
Found 2 solutions by Theo, MathTherapy:
Answer by Theo(13342)   (Show Source): You can put this solution on YOUR website!
formula to use is:

f = p * (1 + r) ^ n

f = future value
p = present value
r equal interest rate per time period
n = number of time periods

in your problem:

f = what you want to find.
p = 5000
r = 3% per year = .03
n = 5 years

formula becomes:

f = 5000 * (1 + .03) ^ 5

solve for f to get f = 5796.370372

the number of compounding periods per year in this problem is 1.

therefore no adjustment is need to convert annual time periods to quarterly time periods or monthly time periods or whatever.

in general, you would do the following.

rate per time period = rate per year divided by number of compounding periods per year.

number of time periods = number of years times number of compounding periods per year.

rate per year = rate percent per year divided by 100.

i'll be available to answer any questions you might have on this.

usual time for a response is normally 1 day after.







Answer by MathTherapy(10552)   (Show Source): You can put this solution on YOUR website!

Using the future value calculation, determine at an interest rate of 3%, what would be your total balance available at the end of five years if you leave the $5,000 untouched. Show your calculations, as well as, your answer in your portfolio.
No-one can tell since you failed to mention the number of COMPOUNDING periods, per year. 

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