If interest rates are 5%,which of the following will produce the largest amount of money in four years?
A) $500 earning simple interest
B) $400 with interest compounded annually
C) $300 with interest compounded semiannually
D) $100 with interest compounded quarterly
E) $25 with interest compounded monthly

Question

Quizplus · Accepted Answer

FV = PV × 11ea7fdb_fc24_6441_a768_19c195e51661_TB2902_00 11ea7fdb_fc24_8b52_a768_d10f462d70aa_TB2902_00 = 500 × .05 × 4 + 500 = $600 11ea7fdb_fc24_8b53_a768_67184535cfb1_TB2902_00 = 400 × 11ea7fdb_fc24_8b54_a768_0598527abd47_TB2902_00 = $486.20 11ea7fdb_fc24_8b55_a768_15ba2ca496cc_TB2902_00 = 300 × 11ea7fdb_fc24_8b56_a768_bf286e8f357d_TB2902_00 = $365.52 11ea7fdb_fc24_8b57_a768_a99e0f246502_TB2902_00 = 100 × 11ea7fdb_fc24_b268_a768_436544fd8b4c_TB2902_00 = $121.99 11ea7fdb_fc24_b269_a768_7db7a5500bcd_TB2902_00 = 25 × 11ea7fdb_fc24_b26a_a768_0333e47b2748_TB2902_00 = $30.52

If Interest Rates Are 5%,which of the Following Will Produce