You have $5,000 in an index mutual fund. At an average annual rate of return of 10% per , this investment should exceed a value of $500,000 by the time you retire in 40 years.

Question

Quizplus · Accepted Answer

The future value of the investment can be calculated using the formula for compound interest: FV = P(1 + r)^n. Plugging in the values: FV = $5,000(1 + 0.10)^40, which results in approximately $226,090, not exceeding $500,000.

You Have $5,000 in an Index Mutual Fund