Meridian Credit Union expects an average annual growth rate of 3% for the next four years. If the assets of the credit union currently amount to $11.4 billion, what will the forecasted assets be in four years?
A) $12.83 billion
B) $1.43 billion
C) $12.85 billion
D) $1.45 billion
E) $32.56 billion

Question

Quizplus · Accepted Answer

The forecasted assets can be calculated using the formula for compound growth: Future Value = Present Value * (1 + growth rate)^number of periods. Here, Present Value = $11.4 billion, growth rate = 3% or 0.03, and number of periods = 4 years. Thus, Future Value = $11.4 billion * (1 + 0.03)^4 ≈ $12.83 billion.

Meridian Credit Union Expects an Average Annual Growth Rate of 3