What is the future value of $500 invested at 8.94% compounded quarterly for 12.5 years (round to nearest $1)?
A)$670
B)$1,510
C)$1,617
D)$46,739

Question

Quizplus · Accepted Answer

We can use the formula for compound interest:

FV = PV*(1+r/n)^(nt)

where PV is the present value (initial investment), r is the interest rate, n is the number of times the interest is compounded per year, t is the time period in years, and FV is the future value.

Plugging in the given values, we get:

FV = 500*(1+0.0894/4)^(4*12.5)
FV ≈ 1,617

Therefore, the future value of $500 invested at 8.94% compounded quarterly for 12.5 years is approximately $1,617. The closest answer choice is C.

What Is the Future Value of $500 Invested at 8