At the end of two years, what will be the balance in a savings account paying 6% annually if $15,000 is deposited today? The future value of one at 6% for one period is 1.06.
A) $15,000
B) $15,900
C) $16,800
D) $16,854

Question

Quizplus · Accepted Answer

To calculate the future value, we need to multiply the present value by (1+interest rate)^number of periods. Here, the present value is $15,000, the interest rate is 6%, and the number of periods is 2.

Future value = $15,000 * (1+0.06)^2 = $16,854

Therefore, the balance in the savings account at the end of two years will be $16,854. The closest choice is D.

At the End of Two Years, What Will Be the Balance