A person opens a bank account with a deposit of $150 what is the future value of this amount after 3 years if the interest rate is 8% compounded quarterly? Select one: a

Finance Aug 13, 2020

A person opens a bank account with a deposit of $150 what is the future value of this amount after 3 years if the interest rate is 8% compounded quarterly? Select one:

a. $190.23

b. $300

c. 188.20

d. 166.29

Expert Solution

Deposit (Present Value or PV) = $ 150; Period (NPER) = 3 years or 12 quarters, Rate (RATE) = 8%; Nature = Quarterly compounding

Using Excel Formula:

PV(RATE,NPER,PMT,-PV,0) = PV(8%/4,12,,-150,0) = $ 190.23

Answer: (a) The future value of the given deposit is $ 190.23

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