Present value of money is 2500, which is invested at 10% and time of investment is 2 years. Calculate the future value.

Solution

The solution is explained below −

Future value = to be calculated

Present value =Rs. 2500/-

Interest rate = 10%

Time = 2 years

          Fv = Pv * [1 + (i/n)] ^ (n*t)
        Fv = 2500 *[1+ (10%/1)] ^ (1*2)
          Fv = 2500 * [1 + 0.1] ^2
            Fv = 2500 * [1.1] ^2
              Fv = 2500 * 1.21
                Fv = 3025/-