A sum of Q will be received 6 years from now At 4 annual int

A sum of Q will be received 6 years from now. At 4% annual interest, the present worth now of Q is $70. At the same interest rate, what would be the value of Q in 10 years? ($103 $87 $113 $98)

Solution

Given present Value is q = $ 70

In 6 years sum of Q will be received on interest rate of 4%

Q = q*(1+0.04)⁶ = 70*(1.04)⁶ = $ 88.57

If q = 70 compoded for 10 years then value of Q = q*(1+0.04)¹⁰ = 70*(1.04)¹⁰ = $ 103.61

The value of Q = $ 103.61 .