Which of the following is the correct way to compute the future value of $1 put into an account that earns 5 percent interest for 20 years? A) $1(1 + .05)²⁰ B) $1(1 + .0520)20 C) $1(1 + .0520) D) $1(1 + 20/.05)²⁰

Question

Quizplus · Accepted Answer

The future value of an investment is calculated using the formula FV = PV(1 + r)^n, where PV is the present value, r is the interest rate, and n is the number of periods. Here, PV = $1, r = 0.05, and n = 20.

Which of the Following Is the Correct Way to Compute