If the interest rate is 10%, at the end of two years the value of $100 invested now is A)$100/1.1 B)$100/1.1² C)$120 D)$121

Question

Quizplus · Accepted Answer

The value of $100 invested at a 10% interest rate compounded annually for two years is calculated using the formula for compound interest: $A = P(1 + r)^n$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), and $n$ is the number of years the money is invested for. Substituting $P = 100$, $r = 0.10$, and $n = 2$ gives $A = 100(1 + 0.10)^2 = 100(1.1)^2 = 121$.

If the Interest Rate Is 10%, at the End of Two