Which of the following investments has a larger future value: Investment A,a $1,000 investment earning 5% per year for 6 years,or Investment B,a $500 investment earning 10% per year for 6 years,with a bonus of an extra $500 added at the end of the sixth year?
A)Investment B,with a future value of $1,386.
B)Investment A,with a future value of $1,386.
C)Investment A,with a future value of $1,340.
D)The investments have equal value.

Question

Quizplus · Accepted Answer

Investment B has a future value of $1,386, calculated as $500 * (1 + 0.10)^6 + $500. Investment A has a future value of $1,340, calculated as $1,000 * (1 + 0.05)^6.

Which of the Following Investments Has a Larger Future Value