Over the next 5 years, you are expecting to receive $500, $600, $600, $800, and $900 respectively. If you can invest this money at 7.5 percent per year over five years, how much will that money be worth at the end of that period?

Question

Quizplus · Accepted Answer

The correct answer is A. The future value of the investment can be calculated using the formula: FV = PV * (1 + r)^n, where PV is the present value, r is the annual interest rate, and n is the number of years. In this case, the present value is the sum of the expected payments, which is $500 + $600 + $600 + $800 + $900 = $3,400. The annual interest rate is 7.5%, and the number of years is 5. Plugging these values into the formula, we get: FV = $3,400 * (1 + 0.075)^5 = $4,337.

Over the Next 5 Years, You Are Expecting to Receive