Question

Suppose an investor is given an investment opportunity that will provide a future value of Kshs 50,000 when it matures at the end of two years. How much would an earning of Kshs 50,000 be at the end of 2 years, at a rate of 10 percent?

Answer 1

FV= PV(1+r)$^n$

$PV= \frac{FV}{(1+r)^n}$

$\frac{50000}{(1.1)^2}= \frac{50000}{1.21}$

= 41,322