the money goes in at the very beginning of 2004 and this will be the value at the very beginning of 2008
It has been invested for exactly 4 full years :)
r is the rate. if the interest rate is 5% per annum then r=0.05
$$FV=A(1+r)^4$$
Hi Michael,
This is a sipmlification of the formula because you would not be getting the interested added on yearly. Often it is accrued daily but added monthly.
If it was added monthly then this would be a better formula
$$FV=A\left(1+\frac{r\;(as\; a \;decimal)}{12}\right)^{(4*12)}$$
.