Which of the following is the correct way to figure the future value of $1 put in an account that earns 5 percent for 20 years?
A)$1(1 + .05)²⁰
B)$1(1 + .05 × 20) 20
C)$1(1 + .05 × 20)
D)$1(1 + 20/.05)²⁰

Question

Quizplus · Accepted Answer

The formula for future value using compound interest is FV = PV(1+r)^n, where PV is the present value, r is the interest rate, and n is the number of periods. Plug in the given values: FV = $1(1+0.05)^20. This simplifies to FV = $2.65, which is the future value of $1 after 20 years of earning 5% interest. Therefore, the correct choice is A.

Which of the Following Is the Correct Way to Figure