Answer:
$81.03
Step-by-step explanation:
Given
[tex]n = 1[/tex] --- annually
[tex]t =3[/tex] --- time
[tex]r = 5\%[/tex] --- rate
[tex]PV = \$70[/tex] ---- Present value
Required
The future value
This is calculated as:
[tex]FV = PV * (1 + \frac{r}{n})^{nt}[/tex]
This gives:
[tex]FV = 70 * (1 + \frac{5\%}{1})^{1*3}[/tex]
[tex]FV = 70 * (1 + 5\%)^3[/tex]
[tex]FV = 70 * (1.05)^3[/tex]
[tex]FV = 70 * 1.157625[/tex]
[tex]FV = 81.03375[/tex]
The future value to the nearest cent is: $81.03
