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Homework answers / question archive / What is the future value at the end of year 18 of $10,000 deposited today into an account that pays interest of 4

What is the future value at the end of year 18 of $10,000 deposited today into an account that pays interest of 4

Finance

What is the future value at the end of year 18 of $10,000 deposited today into an account that pays interest of 4.5% p.a., but with daily compounding (assume 365 days per year)? 

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Computation of Future Value:

Future Value = Present Value*(1+Rate/Number of Compounding Periods)^(Time*Number of Compounding Periods)

= $10,000*(1+4.5%/365)^(18*365)

= $10,000*2.2448

Future Value = $22,477.96

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