Can you help me with the following questions:
- What is the difference between the accumulated amount (future value) and the present value of an investment? Please give examples of each.
- Find the accumulated amount at the end of 8 mo on a $1200 bank deposit paying simple interest at a rate of 7%/year.
- A bank deposit paying simple interest at the rate of 5%/year grew to a sum of $3100 in 10 months. find the principle.
- Five and a half years ago, Chris invested $10,000 in a retirement fund that grew at the rate of 10.82%/year compounded quarterly. What is his account worth today?
- If Jackson deposits $100 at the end of each month in a savings account earning interest at the rate of 8%/year compounded monthly, how much will he have on deposit in his savings account at the end of 6 yr, assuming that he makes no withdrawals during that period?
Please find the solution attached. Thank you for asking Brainmass.
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Accumulated Amount (future Value) -
Since the money value is always changing future value is never the same as present value. Future value is the sum of money that you'll get for today's money in future. This future money value can be increased by doing some sort of investment.
Present value -
This is the value of the money that you've at the current date and ...
The differences between the accumulated amount and the present value of an investment is determined.