Solve the problem. Refer to the table if necessary.
-Greg plans to contribute $500 per year to a retirement plan and is debating the use of a certificate of deposit that pays 2% per year versus a stock fund that he believes will yield 6% per year. Find the future value after 15 years of the CD and the stock fund.

Question

Solve the problem. Refer to the table if necessary. 
-Greg plans to contribute $500 per year to a retirement plan and is debating the use of a certificate of deposit that pays 2% per year versus a stock fund that he believes will yield 6% per year. Find the future value after 15 years of the CD and the stock fund.

Quizplus · Accepted Answer

The correct answer is A because the future value of the CD is $8,646.71 and the future value of the stock fund is $11,637.99. The future value of the CD is calculated using the formula FV = PV * (1 + r)^n, where PV is the present value, r is the annual interest rate, and n is the number of years. The future value of the stock fund is calculated using the same formula, but with a different annual interest rate.

Solve the Problem