What is the future value of $500 invested at 9.5% 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 = P(1 + r/n)^(nt)

where FV is the future value, P is the principal (initial investment), r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is the number of years.

Substituting the given values, we get:

FV = 500(1 + 0.095/4)^(4*12.5) = 1616.93

Rounding to the nearest dollar gives us $1,617, which is closest to choice C.

What Is the Future Value of $500 Invested at 9