The value of a current asset at some point in the future related on an assumed rate of growth exists comprehended as future value (FV).
We conclude that you will contain approximately 8099.15 in your account in 10 years.
What is meant by Future Value?
The value of an asset at a future date is its future value. It is the present value multiplied by the accumulation function, and it represents the nominal amount of money that a given amount of money will be "worth" at a given point in the future under the assumption of a specific interest rate.
Future value is the value of a current asset at some point in the future based on an assumed rate of growth (FV). The future value is important to investors and financial planners because they use it to estimate how much an investment made today will be worth in the future.
Since the interest exists compounded continuously, we need to utilize the following formula to estimate the Future Value:
[tex]$A=P e^{(r t)}$[/tex], where
P is the Principal Amount (Initial deposit)
r is the Rate of Interest
t is the Period of deposit
A is the Future Value
Let us substitute the values from our problem to calculate the amount payable (Future Value) at the end of 10 years.
P = $ 6000
r = 0.03
t = 10
Let the equation be [tex]$A=P e^{(r t)}$[/tex]
substitute the values in the above equation, we get
Future Value [tex]$(\mathrm{A})=6000 \cdot e^{(0.03)(10)}$[/tex]
simplifying the above equation, we get
A = 8099.15
Therefore, we conclude that you will contain approximately 8099.15 in your account in 10 years.
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