Your grandmother places $13,000 into an account earning an interest rate of 7% per year.After 5 years the account will be valued at $18,233.17.Which of the following statements is CORRECT?
A)The present value is $13,000,the time period is 7 years,the present value is $18,233.17,and the interest rate is 5%.
B)The future value is $13,000,the time period is 5 years,the principal is $18,233.17,and the interest rate is 7%.
C)The principal is $13,000,the time period is 5 years,the future value is $18,233.17,and the interest rate is 7%.
D)The principal is $13,000,the time period is 7 years,the future value is $18,233.17,and the interest rate is 5%.

Question

Quizplus · Accepted Answer

The principal, or initial deposit, is $13,000. The time period is 5 years, as stated in the problem. The future value, or the value of the account after 5 years, is given as $18,233.17. Finally, the interest rate per year is stated as 7%. Therefore, choice C is the correct statement.

Your Grandmother Places $13,000 into an Account Earning an Interest