1. What balance will be in an account at the end of 10 years, if € 3 500 is deposited today and the account earns 3,5% annual interest, compounded a) monthly? using TVM functionsmannullyPrincipalInterest rate Time periodCompounding frequencyTotal number of compounding periodsInterest per periodTotal Interest earned Final balance = FVFinal balance = FV (EUR)(as a decimal) (number of years) (times per year)(as a decimal) (EUR) (EUR) (EUR)3,5000.035101100.03501,437.104,937.104,937.103,5000.035102200.01751,451.724,951.724,951.723,5000.035104400.00881,459.184,959.184,959.183,5000.03510121200.00291,464.214,964.214,964.21

Future value refers to the value of an asset on a specified date in the future. It can be calculated…

Answered: 1. What balance will be in an account…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 36P

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1. What balance will be in an account at the end of 10 years, if € 3 500 is deposited today and the account earns 3,5% annual interest, compounded a) monthly?
							using TVM functions	mannully
Principal	Interest rate	Time period	Compounding frequency	Total number of compounding periods	Interest per period	Total Interest earned	Final balance = FV	Final balance = FV
(EUR)	(as a decimal)	(number of years)	(times per year)	(as a decimal)	(EUR)	(EUR)	(EUR)
3,500	0.035	10	1	10	0.0350	1,437.10	4,937.10	4,937.10
3,500	0.035	10	2	20	0.0175	1,451.72	4,951.72	4,951.72
3,500	0.035	10	4	40	0.0088	1,459.18	4,959.18	4,959.18
3,500	0.035	10	12	120	0.0029	1,464.21	4,964.21	4,964.21

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