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Calculation of future value of money considering time value : What is the ending balance from an initial deposit of $5,000 at 14% compounded monthly for 4 years?

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									              Sub: Finance                                                              Topic: Time Value of Money



              Question:
              Calculation of future value of money considering time value.

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              What is the ending balance from an initial deposit of $5,000 at 14%
              compounded monthly for 4 years?

              Solution:
                               Initial deposit =                                          $5,000        =P




                               I=                                         14%                         Nominal rate
                               n=                                          12
                               t=                                           4



                               r = Effective rate for the entire
                               period =                                                   74.50%

                               So ending balance =                                                    $
                ANSWER         P*(1+r) =                                                              8,725.03


                                                          ** End of the Solution **


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