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

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

$=Kshs50,000(1+0.1)^2$

$=50,000(1.1)^2= 60500$

$FV=Kshs60500$