You wish to make a substantial down payment on a lake cottage and you currently have $18,325 invested at an annual rate of 4.75%.How much money will be in the account in 2.5 years if it continues to earn at its present rate?
A)$18,325
B)$19,464
C)$20,579
D)$20,605

Question

Quizplus · Accepted Answer

The future value of the investment can be calculated using the formula for compound interest: FV = P(1 + r)^t, where P is the principal amount ($18,325), r is the annual interest rate (0.0475), and t is the time in years (2.5). Plugging in these values gives FV = $18,325 * (1 + 0.0475)^2.5 = $20,579.

You Wish to Make a Substantial Down Payment on a Lake