Compute the future value in year 12 of a $2,000 deposit in year 3 and another $4,000 deposit at the end of year 5 using a 10% interest rate.
A) $12,510.77
B) $12,909.81
C) $13,4067.31
D) $15,007.52

Question

Quizplus · Accepted Answer

The correct answer is A because the future value of the $2,000 deposit in year 3 is $2,000 * (1 + 0.1)^9 = $3,310.01, and the future value of the $4,000 deposit at the end of year 5 is $4,000 * (1 + 0.1)^7 = $6,200.76. The total future value is $3,310.01 + $6,200.76 = $12,510.77.

Compute the Future Value in Year 12 of a $2,000