If the present value is $464.27 and the rate of return is 0.021, how much will you have in one year?

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BlackTom AI · Accepted Answer

Question restatement: If the present value is $464.27 and the rate of return is 0.021, how much will you have in one year?

First, identify the formula for a single-period future value with a given rate of return: Future Value = Present Value × (1 + rate). This encapsulates both the initial amount and the growth over one year.

Step-by-step calculation:
- Present Value (PV) = 464.27
- Rate (r) = 0.021 (which is 2.1%)
- Compute 1 + r = 1.021.
- Multiply PV by 1.021: 464.27 × 1.021 = 464.27 × (1 + 0.021) = 464.27 + (464.27 × 0.021).
- Calculate the increment: 464.27 × 0.021 = 464.27 × 21 ÷ 1000 = 9.74167.
- Add the increment to the principal: 464.27 + 9.74167 = 474.01167.
- Round to the standard currency precision (two decimals): 474.01.

If we consider any alternative interpretation, such as continuous compounding or different compounding periods, the approach would change, but for a single-year, single-period with a stated rate, the straightforward calculation uses FV = PV × (1 + r).

Summary of result: The future value after one year, using a 2.1% return on $464.27, is $474.01 when rounded to the nearest cent.

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If the present value is $464.27 and the rate of return is 0.021, how much will you have in one year?

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