Adam plans to invest $1500 today in a mutual fund. If he earns 12 percent interest compounded monthly, to what amount will his investment grow in 20 years? Use a financial calculator to make the calculation.
A) $17,289
B) $15,897
C) $16,339
D) $12,450
E) $18,546

Question

Quizplus · Accepted Answer

To calculate this using a financial calculator, we can use the formula PV = 1500, N = 240 (20 years x 12 months), I/Y = 1 (12% divided by 12 months), PMT = 0 (since there will be no additional payments). Then, we can solve for FV (future value), which gives us $16,339. Therefore, the answer is C.

Adam Plans to Invest $1500 Today in a Mutual Fund