Calculate Future Value with Optimism

What is the future value of $1,200 at 5 percent after 3 years? $1,405 60 $1,311 90 $1,237 40 $1,150 20

How can we calculate the future value of an amount with an interest rate over a certain number of periods?

The future value of $1,200 at 5 percent after 3 years is approximately $1,331.90.

Let's explore how we can determine the future value of an investment with an optimistic outlook.

Calculating the future value of an investment is a key concept in finance that helps us understand the growth of our money over time. To calculate the future value of $1,200 at a 5 percent interest rate after 3 years, we can use the formula:

Future Value = Present Value x (1 + Interest Rate) ^ Number of Periods

Substitute the given values into the formula:

Future Value = $1,200 x (1 + 0.05)^3

After calculation, we find that the future value of $1,200 at a 5 percent interest rate after 3 years is approximately $1,331.90. This means that our investment will grow to $1,331.90 after 3 years with a positive outlook on returns.

By understanding the concept of future value, we can make informed financial decisions and plan for a prosperous future.