The future value of the investment is $4,017.72
The future value of a lump sum that is compounded can be determined using this formula:
FV = P (1 + r)^nm
2000 x (1 + 0.00583)^(12 x 10)
= 2000 x (1.00583)^120
= $4,017.72
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The future value of a 10-year investment of $2000 at an APR of 7% compounded monthly is $4,019.32.
The future value of an investment is the present value of the investment compounded periodically at a stated interest rate into the future.
The future value can be computed using an online finance calculator as follows:
N (# of periods) = 120 (10 years x 12)
I/Y (Interest per year) = 7%
PV (Present Value) = $2,000
PMT (Periodic Payment) = $0
Results:
FV = $4,019.32
Total Interest = $2,019.32
Thus, this means a $2,000 investment now will be worth $4,019.32 in the future with the assumed constant APR.
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