Michaela is supposed to pay $15,000 to Mahmoud, but due to financial constraints, has to be delayed by one quarter. Determine the future amount if the rate of interest is 11.45%
A) $14,618.43
B) $14,727.31
C) $15,429.38
D) $15,631.42
E) $17,727.66

Question

Quizplus · Accepted Answer

To find the future amount Michaela will pay Mahmoud after one quarter at an interest rate of 11.45%, we use the formula for future value: FV = PV(1 + r)^n, where PV is the present value ($15,000), r is the quarterly interest rate (11.45% annual rate divided by 4, assuming compound interest quarterly), and n is the number of periods (1 quarter). The calculation is as follows: FV = $15,000 * (1 + 0.1145/4)^1 = $15,429.38.

Michaela Is Supposed to Pay $15,000 to Mahmoud, but Due