QuestionJune 4, 2025

What is the future value of 1,900 invested at 4% for two years? 2,055.04 2,236.09 1,976.00 3,070.80

What is the future value of 1,900 invested at 4% for two years? 2,055.04 2,236.09 1,976.00 3,070.80
What is the future value of 1,900 invested at 4%  for two years?
 2,055.04
 2,236.09
 1,976.00
 3,070.80

Solution
4.0(200 votes)

Answer

\ 2,055.04 Explanation 1. Identify the formula for future value Use the formula for compound interest: **FV = P(1 + r)^n**, where P is the principal, r is the annual interest rate, and n is the number of years. 2. Substitute values into the formula P = 1900, r = 0.04, n = 2. Calculate FV = 1900(1 + 0.04)^2. 3. Perform the calculation FV = 1900 \times (1.04)^2 = 1900 \times 1.0816 = 2055.04.

Explanation

1. Identify the formula for future value<br /> Use the formula for compound interest: **$FV = P(1 + r)^n$**, where $P$ is the principal, $r$ is the annual interest rate, and $n$ is the number of years.<br />2. Substitute values into the formula<br /> $P = 1900$, $r = 0.04$, $n = 2$. Calculate $FV = 1900(1 + 0.04)^2$.<br />3. Perform the calculation<br /> $FV = 1900 \times (1.04)^2 = 1900 \times 1.0816 = 2055.04$.
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