If the present value of an individual's savings account is $100,000, what is its future value in 5 years if the account earns an annual interest rate of 2 percent?
A)$110,250.00
B)$110,408.08
C)$112,125.40
D)$109,582.03

Question

Quizplus · Accepted Answer

We can use the formula for future value: FV = PV * (1 + r)^n
Where PV = 100,000, r = 0.02, and n = 5.
Plugging in the values, we get:
FV = 100,000 * (1 + 0.02)^5
FV = 100,000 * 1.1040808
FV = $110,408.08
Therefore, the best choice is B.

If the Present Value of an Individual's Savings Account Is