Lori Willis plans to invest for retirement, which she hopes will be in 20 years. She is planning to invest $25,000 today in U.S. Treasury bonds that will earn interest at 6.25 percent annually. How much will she have at the end of 20 years? (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

To find the future value of Lori's investment, we can use the formula: FV = PV x (1 + r)^n, where PV is the present value (i.e. $25,000), r is the interest rate expressed as a decimal (i.e. 0.0625), and n is the number of periods (i.e. 20 years). Plugging in these values, we get: FV = $25,000 x (1 + 0.0625)^20 = $84,045.96. Rounded to the nearest dollar, this becomes $84,046. Therefore, the best choice is C, which matches this result.

Lori Willis Plans to Invest for Retirement, Which She Hopes