Jasper Company will invest $300,000 today.The investment will earn 6% for 5 years, with no funds withdrawn.In 5 years, the amount in the investment fund is

Question

Quizplus · Accepted Answer

To find the amount in the investment fund after 5 years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

where:
A = amount after time t
P = principal (initial investment)
r = annual interest rate (as a decimal)
n = number of times the interest is compounded per year
t = time in years

In this case, P = $300,000, r = 6%, n = 1 (compounded annually), and t = 5. Substituting these values into the formula, we get:

A = $300,000(1 + 0.06/1)^(1*5)
A = $300,000(1.338225)
A = $401,467.50

Therefore, the amount in the investment fund after 5 years is $401,467.50. The closest answer choice is C.

Jasper Company Will Invest $300,000 Today