You have $12,500 you want to invest for the next 30 years.You are offered an investment plan that will pay you 7 percent per year for the next 10 years and 9.5 percent per year for the last 20 years.How much will you have at the end of the 45 years?
A)$101,516.38
B)$119,874.49
C)$151,018.51
D)$190,253.91
E)$209,092.54

Question

Quizplus · Accepted Answer

First, calculate the future value after 10 years at 7%: $12,500 * (1 + 0.07)^10 = $24,543.40. Then, calculate the future value of this amount for the next 20 years at 9.5%: $24,543.40 * (1 + 0.095)^20 = $151,018.51.

You Have $12,500 You Want to Invest for the Next