How much would be in your savings account in 11 years after depositing $150 today, if the bank pays 7 percent per year?Recalculate the savings account balance, using a 6 percent interest rate, and again, using an 8 percent interest rate

Finance Aug 28, 2020

How much would be in your savings account in 11 years after depositing $150 today, if the bank pays 7 percent per year?Recalculate the savings account balance, using a 6 percent interest rate, and again, using an 8 percent interest rate.

I have the first part but how do it for the 8 and the 6

Expert Solution

Computation of the future value when the interest rate 7%:-

FV = PV*(1+rate)^n

= $150*(1+7%)^11

= $150*2.10485

= $315.73

Computation of the future value when the interest rate 6%:-

FV = PV*(1+rate)^n

= $150*(1+6%)^11

= $150*1.8983

= $284.74

Computation of the future value when the interest rate 8%:-

FV = PV*(1+rate)^n

= $150*(1+8%)^11

= $150*2.33164

= $349.75

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