Suppose you put $500 into a bank account today. Interest is paid annually and the annual interest rate is 8 percent. The future value of the $500 after 2 years is
A) $428.67.
B) $470.00.
C) $580.00. 1.
D) $583.20.

Question

Quizplus · Accepted Answer

The formula for calculating the future value of an investment is FV = PV × (1 + r)^n, where FV is the future value, PV is the present value, r is the annual interest rate as a decimal, and n is the number of years.

Plugging in the given values, we get FV = 500 × (1 + 0.08)^2 = $583.20, rounded to the nearest cent. Therefore, the correct answer is D.

Suppose You Put $500 into a Bank Account Today