$800 invested at an annually compounded interest rate of 6 percent will be worth how much at the end of 10 years?
A) $1,280
B) $1,433
C) $1,417
D) $1,369

Question

Quizplus · Accepted Answer

To calculate the future value of the investment, we use the formula:
FV = PV * (1 + r)^n
where FV is the future value, PV is the present value (the initial investment), r is the interest rate (expressed as a decimal), and n is the number of compounding periods (in this case, 10 years).

Plugging in the values, we get:
FV = $800 * (1 + 0.06)^10
FV = $800 * 1.791
FV = $1,432.80

Rounding to the nearest penny, we get an answer of $1,433, which is choice B.

$800 Invested at an Annually Compounded Interest Rate of 6