Compounding with Different Interest Rates A deposit of $300 earns interest rates of 7 percent in the first year and 10 percent in the second year.What would be the second year future value?
A)$351.00
B)$353.10
C)$602.17
D)$651.00

Question

Quizplus · Accepted Answer

The future value after the first year is $300 * (1 + 0.07) = $321. The future value after the second year is $321 * (1 + 0.10) = $353.10.

Compounding with Different Interest Rates a Deposit of $300 Earns