Which of the following is the correct way to compute the future value of $100 put into an account that earns 4 percent interest for 10 years? A)$100(1 + .04¹⁰) B)$100(1 + .04 × 10) C)$100 × 10 × (1 + .04) D)$100(1 + .04)¹⁰

Question

Quizplus · Accepted Answer

The correct way to compute the future value of an investment using compound interest is by using the formula $P(1 + r)^n$, where $P$ is the principal amount, $r$ is the annual interest rate, and $n$ is the number of years. Choice D correctly represents this formula as $100(1 + .04)^{10}$, indicating $100 invested at 4% interest compounded annually for 10 years.

Which of the Following Is the Correct Way to Compute