Question

If an investment of Rs. 1,000 is made today, ascertain its Future Value (FV) after 2 years if the rate of interest is taken as 10%?

Answer 1

Given Data:

Present Value (PV)/Principal Amount: Rs. 1,000

Rate of Interest (R): 10% per annum (or 0.10)

Number of Years (N): 2 years

Future value FV = PV(1 + r)ⁿ.

FV = 1000 × (1 + 0.10)²

= 1000 × 1.21

= Rs. 1,210

So the future value after 2 years is Rs. 1,210.