Your aunt 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 (amount initially invested) is $13,000, the time period is 5 years, the future value (amount at the end of 5 years) is $18,233.17, and the interest rate is 7%. Option C correctly matches all the values with their respective categories. The other options have incorrect values for one or more categories.

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