Answer:
Results are below.
Explanation:
Giving the following information:
Initial investment (PV)= $2,000
Number of periods (n)= 5*12= 60 months
Interst rate (r)= ?
Suppose an interest rate of 8% compounded monthly.
First, we need to determine the monthly interest rate:
i= 0.08/12= 0.0067
To calculate the future value after 5 years, we need to use the following formula:
FV= PV*(1+r)^n
FV= 2,000*1.0067^60
FV= $2,985.62
