Suppose that you invest $100 today in a risk-free investment and let the 5 percent annual interest rate compound. Rounded to full dollars, what will be the value of your investment 6 years from now?

Question

anonymous · Answer

The formula for compound interest is given as:

C.I. = Value of Investment * ((1+ (I.R./100))^n)

C.I. is Compound Interest
I.R. is the Interest Rate
n is the number of years

Value of Investment= $100
(1+ (I.R./100)) = 1+ 0.05 =1.05
n=6

Put that into the formula and its done!

anonymous · Answer

|dw:1335969960344:dw|