Wexter and Daughter invested $165,000 to help fund a company expansion project planned for 3 years from now. How much additional money will the ﬁrm have saved 3 years from now if it can
Earn 7% rather than 5% on this money?
A) $7,940.09
B) $8,218.07
C) $11,123.97
D) $12,648.18
E) $13,211.21

Question

Quizplus · Accepted Answer

The future value of the investment at 7% interest is calculated using the formula FV = PV * (1 + r)^n, where PV is the present value ($165,000), r is the interest rate (0.07), and n is the number of years (3). Similarly, calculate the future value at 5% interest. The difference between these two future values is the additional money saved. The calculation shows that the additional amount is $11,123.97.

Wexter and Daughter Invested $165,000 to Help Fund a Company