Items 65 through 68 apply to the appropriate use of interest tables. Given below are the future value factors for 1 at 8% for one to five periods. Each of the items 65 to 68 is based on 8% interest compounded annually.

-What amount will be in a bank account three years from now if $8,000 is invested each year for four years with the first investment to be made today?
A) ($8,000 × 1.260) + ($8,000 × 1.166) + ($8,000 × 1.080) + $8,000
B) $8,000 × 1.360 × 4
C) ($8,000 × 1.080) + ($8,000 × 1.166) + ($8,000 × 1.260) + ($8,000 × 1.360)
D) $8,000 × 1.080 × 4

Question

Items 65 through 68 apply to the appropriate use of interest tables. Given below are the future value factors for 1 at 8% for one to five periods. Each of the items 65 to 68 is based on 8% interest compounded annually.
 
-What amount will be in a bank account three years from now if $8,000 is invested each year for four years with the first investment to be made today?
A) ($8,000 × 1.260) + ($8,000 × 1.166) + ($8,000 × 1.080) + $8,000 
B) $8,000 × 1.360 × 4 
C) ($8,000 × 1.080) + ($8,000 × 1.166) + ($8,000 × 1.260) + ($8,000 × 1.360) 
D) $8,000 × 1.080 × 4

Quizplus · Accepted Answer

The correct answer reflects the application of compound interest on each $8,000 investment at different intervals until three years from now, with each term representing the growth of each year's investment over the time it remains invested.

Items 65 Through 68 Apply to the Appropriate Use of Interest