To calculate the future value of an investment, we can use the formula:
Future Value (FV) = Present Value (PV) x (1 + r)
Where:
- FV = Future Value
- PV = Present Value (the amount you are investing now)
- r = interest rate (expressed as a decimal)
In this case:
- PV = $500
- r = 6% = 0.06
Now, substituting the values into the formula, we get:
FV = $500 x (1 + 0.06)
This simplifies to:
FV = $500 x 1.06
Calculating this gives:
FV = $530
So, the future value of $500 one year from today, at an interest rate of 6%, will be $530.