A deposit of $1,000 earns the following interest rates?
8 percent in the first year,
7 percent in the second year, and
8 percent in the third year.
What would be the third year future value?
A) $1,082.15
B) $1,230.00
C) $1,248.05
D) $3,030.00

Question

Quizplus · Accepted Answer

The future value is calculated using compound interest for each year. First year: $1,000 * 1.08 = $1,080. Second year: $1,080 * 1.07 = $1,155.60. Third year: $1,155.60 * 1.08 = $1,248.05.

A Deposit of $1,000 Earns the Following Interest Rates