At the end of two years, what will be the balance in a savings account paying 6% annually if €10,000 is deposited today? The future value of one at 6% for one period is 1.06.
A) €10,000
B) €10,600
C) €11,200
D) €11,236

Question

Quizplus · Accepted Answer

To calculate the balance after two years, we need to multiply the initial deposit by the future value factor for two years at 6% interest.
Future value factor for two years at 6% interest= 1.06^2= 1.1236
So, the balance after two years= €10,000 x 1.1236= €11,236
Therefore, the correct answer is D.

At the End of Two Years, What Will Be the Balance