Use the table to solve the problem. Round to the nearest cent.
-Lexi can invest $7,330 for 3 years at 8% compounded quarterly. Find the future value.
A)$92,336,743.00
B)$9,089.20
C)$9,296.20
D)$184,581,861.00

Question

Use the table to solve the problem. Round to the nearest cent. 
-Lexi can invest $7,330 for 3 years at 8% compounded quarterly. Find the future value.
A)$92,336,743.00 
B)$9,089.20 
C)$9,296.20 
D)$184,581,861.00

Quizplus · Accepted Answer

Using the formula for compound interest, we have:

Future Value = Principal x (1 + (rate/n))^(n x time)

where n is the number of times compounded per year and time is in years.

Plugging in the given values, we get:

Future Value = 7330 x (1 + (0.08/4))^(4 x 3) = $9,296.20

Therefore, the best choice is C. Option A and D are clearly wrong as they are extremely large values. Option B is also incorrect as it is much lower than the initial investment amount. Using the formula $A=P\left(1+\frac{r}{n}\right)^{nt}$, where $A$ is the future value, $P$ is the principal, $r$ is the annual interest rate, $n$ is the number of compounding periods per year, and $t$ is the time in years, we can calculate:

$A=7330\left(1+\frac{0.08}{4}\right)^{4\cdot3}\approx9296.20$

Therefore, the best choice is C. None of the other options are close to this value.

Use the Table to Solve the Problem