$70,000 is put in an investment account today. The investment account compounds interest at a rate of 2% per month. What amount will be available five years from today? Use the formula method. (Do not round any intermediary calculations, and round your final answer to the nearest dollar.)
A) $104,016
B) $154,000
C) $85,330
D) $229,672

Question

Quizplus · Accepted Answer

The future value of an investment compounded monthly is calculated using the formula: FV = P(1 + r/n)^(nt). Here, P = $70,000, r = 0.02, n = 12, and t = 5. Plugging in these values, FV = 70000(1 + 0.02/1)^(1*60) = 70000(1.02)^60 ≈ $229,672.

$70,000 Is Put in an Investment Account Today