Question
Please help, what am I doing wrong in the below exercise? - You deposit $5,000 in a bank account that earns 2% simple interest annually.
Please help, what am I doing wrong in the below exercise?
- You deposit $5,000 in a bank account that earns 2% simple interest annually. What is the value of your $5,000 in five years?
FV = PV * (1 + i)t
FV= $5000 * (1 + 0.02)5
FV= $5000 * (1.02)5
FV= $5000 * 1.10408
FV= $5,520.40
However I know the correct answer answer is $5,500
what am I doing wrong? please and thank you!
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Gapenskis Cases In Healthcare Finance
Authors: George H. Pink
6th Edition
1567939651, 978-1567939651
