Which of the following best expresses the payment a saver receives for investing their money for two years?
A)PV + PV
B)PV + PV(1 + i)
C)PV(1 + i)2
D)2PV(1 + i)

Question

Quizplus · Accepted Answer

The formula for calculating the future value (FV) of an investment is FV = PV(1 + i)^n, where PV is the present value or initial investment, i is the interest rate, and n is the number of periods. In this case, we have n = 2 (since the investment is for two years), and we want to find the future value, so we can rearrange the formula as FV = PV(1 + i)^2. Therefore, the payment a saver receives for investing their money for two years is PV times (1 + i) squared.

Which of the Following Best Expresses the Payment a Saver