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Your savings account is currently worth $1,200. The account pays 5 percent interest compounded annually. How much will your account be worth 6 years from now?

Respuesta :

Answer:

$2,010  

Explanation:

The future value of the savings account in 6 years can be computed using the below future value formula:

FV=PV*(1+r)^n

FV=unknown future amount

PV=current worth of the savings account=$1,200

r=annual interest rate=5%

n=number of years envisaged=6

FV=$1,500*(1+5%)^6

FV=$1,500*(1.05)^6

FV=$1,500*1.3400956  

FV=$2,010  

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