Jennifer invested $20,000 in a savings account for 3 years at Compounded annually. Jennifer's investment future value is Future value = $20,000 x (1.06)3 = $23,820
What is Future Value?
The worth of a current asset at some point in the future based on an estimated rate of growth is known as future value (FV). For investors and financial planners, the future value is crucial because they use it to predict how much an investment made now will be worth in the future. Investors can make wise investment choices based on their projected demands by knowing the future worth. However, external economic forces that depreciate an asset's value, such inflation, might have a negative impact on the asset's future worth. One can compare present value (PV) to future value.
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