Find the future value at the end of 5 years of $900 invested today at an interest rate of 17 per cent.a.$1992.1b.$1968.62c.$1976.5d.$1973.2
Question
Find the future value at the end of 5 years of $900 invested today at an interest rate of 17 percent.
a. 1968.62
c. 1973.2
Solution
To find the future value of an investment, you can use the formula for compound interest, which is:
FV = PV * (1 + r/n)^(nt)
Where: FV = Future Value PV = Present Value r = annual interest rate (in decimal form) n = number of times that interest is compounded per year t = time the money is invested for in years
Given in the problem: PV = $900 r = 17% or 0.17 (in decimal form) n = 1 (since it's not mentioned, we assume the interest is compounded annually) t = 5 years
Substitute these values into the formula:
FV = 900 * (1 + 0.17/1)^(1*5) FV = 900 * (1.17)^5 FV = 900 * 2.08008426 FV = $1872.08
So, none of the options given in the question are correct. The future value of 1872.08.
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