What's the future value of $1,200 after 5 years if the appropriate interest rate is 6%, compounded monthly?
A) $1,537.69
B) $1,618.62
C) $1,699.55
D) $1,784.53
E) $1,873.76

Question

Quizplus · Accepted Answer

We can use the formula A=P(1+r/n)^(nt), where A is the future value, P is the initial principal, r is the interest rate (as a decimal), n is the number of times the interest is compounded per year, and t is the number of years. Plugging in the values, we get A=1200(1+0.06/12)^(12*5)=1618.62, which is closest to option B.

What's the Future Value of $1,200 After 5 Years If