BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The principal is $13, 000, the time period is 5 years, the future value is $18, 233.17, and the interest rate is 7%.
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The future value is $13, 000, the time period is 5 years, the principal is $18, 233.17, and the interest rate is 7%.
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The principal is $13, 000, the time period is 5 years, the future value is $18, 333.17, and the interest rate is 7%.
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The principal is $13, 000, the time period is 7 years, the future value is $18, 233.17, and the interest rate is 5%.
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Detailed explanation-1: -The future value of $500 one year from today if the interest rate is 6 percent is $530.
Detailed explanation-2: -Future value formula for simple interest: A = P(1 + rt) where A is the future amount, P is the principal amount, r is the simple interest rate in decimal form, and t is the number of time periods that will have passed until the future date corresponding to A.
Detailed explanation-3: -FV is an important financial concept because it helps investors determine the value of the investment during a set number of years. Inflation, rate of return, or economic events, can change the value of money over time.
Detailed explanation-4: -Compound interest is the term we use to refer to interest income earned in subsequent periods that is based on interest income earned in prior periods. To put it simply, compound interest refers to interest that is earned on interest.