A two-year investment $10,000 has an interest rate of 4% per year, compounded annually. What is the future value?

Name: A two-year investment $10,000 has an interest rate of 4% per year, compounded annually. What is the future value?
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Question

Quizplus · Accepted Answer

The future value of an investment is calculated using the formula FV = P(1 + r)^n, where P is the principal amount ($10,000), r is the annual interest rate (4% or 0.04), and n is the number of years (2). Plugging in these values gives FV = $10,000(1 + 0.04)^2 = $10,816.

A Two-Year Investment $10,000 Has an Interest Rate of 4