Anonymous
Anonymous asked in Education & ReferenceHomework Help · 2 months ago

# Calculate the future value of \$12,000 invested for 18 years assuming an annual interest rate 12% compounded monthly?

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The formula for the FV of \$1 is PV x (1+R)^N, or 12,000 x (1.01)^216 = 102,943.

Since it's compounded monthly, R = 12% / 12 and N = 18 x 12

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• If you just want the number, any spreadsheet program or scientific calculator has a future value function.

If this is for a class, your textbook tells you how to do the math.

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• LOL, you're not gonna get 12% as a long-term average.

You might get 12% one year and -5% the next year.

If you asked this question under "Homework help" instead of personal finance, someone might have told you which formula from your textbook to use for monthly compound interest.

• STEVEN F
Lv 7
2 months agoReport

Actually, 12% is the 70+ year average stock market return.

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• Anonymous
2 months ago

FV = 12,000 * 1.12^18

Might want to actually look in your textbook one of these days.

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