A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)

Question

Quizplus · Accepted Answer

The future value of a lump sum compounded annually is calculated using the formula: FV = P(1 + r)^n, where P is the principal amount ($8,000), r is the annual interest rate (0.09), and n is the number of years (12). Plugging in the values: FV = 8000(1 + 0.09)^12 ≈ $22,500.

A Lump Sum Deposit of $8,000 Left in the Bank