Question

If $500 is invested at an annual interest rate of 8% per year, its future worth at the end of 30 years will be most nearly:_________. a. $1, 200 b. $1, 700 c. $5, 031 d. $15,000

Answer 1

c. $5,031

Step-by-step explanation:

The value of amount the dollar invested today is going to be worth in Future is known as its Future Value.

The Future Value is calculated using Time Value of Money techniques. Here i will specifically use a financial calculator as below :

PV = - $500

I = 8%

N = 30

PMT = $0

P/YR = 1

FV = ?

Inputting the values as shown gives a Future Value of $5,031

The future worth at the end of 30 years will be most nearly be c. $5, 031