Respuesta :

The future value of $1,000 today if it draws interest at 8% compounded annually for 10 years is $215

To find:

The future value of the borrowed amount after 10 years

The investment's present value, or PV, is $1000.

The rate of interest, r = 8% =8/100 = 0.08.

The time in years, t = 10.

n = 1 since the sum is compounded yearly.

The future value formula of compound interest:

FV = PV (1 + r / n)n t

FV = 1000(1+0.08/1)1x10

A = $2159

The future value = $2159

What is Future value ?

  • Future value is the value of a current asset at some time in the future based on an anticipated growth rate (FV).
  • Investors can reasonably forecast an investment's profit using the FV formula.
  • Calculating the FV of a market investment can be challenging because to market volatility and uncertainty over future investing conditions.
  • One of two methods—compound interest or simple interest—can beused to calculate an asset's FV.

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