Christopher invests $400 today at a 4% rate of return which is compounded annually. What is the future value of this investment after four years?
A) $342
B) $416
C) $464
D) $468

Question

Quizplus · Accepted Answer

The future value is calculated using the formula FV = P(1 + r)^n, where P is the principal amount ($400), r is the annual interest rate (0.04), and n is the number of years (4). Plugging in the values, FV = 400(1 + 0.04)^4 = 400(1.16985856) ≈ $468.

Christopher Invests $400 Today at a 4% Rate of Return