Suppose you put $500 into a bank account today.Interest is paid annually and the annual interest rate is 5.5 percent.The future value of the $500 is
A)$637.50 after 5 years and $822.09 after 10 years.
B)$637.50 after 5 years and $775.00 after 10 years.
C)$653.48 after 5 years and $854.07 after 10 years.
D)$688.36 after 5 years and $915.56 after 10 years.

Question

Quizplus · Accepted Answer

The formula to calculate the future value of an investment with annual compounding interest is:
FV = P(1 + r)^n
Where 
FV = Future Value
P = Principal (the initial investment amount)
r = annual interest rate (in decimal form)
n = number of years

Using this formula, we can calculate the future value of $500 after 5 years as:
FV = $500(1 + 0.055)^5 = $653.48

Similarly, the future value after 10 years can be calculated as:
FV = $500(1 + 0.055)^10 = $854.07

Hence, the best choice is C.

Suppose You Put $500 into a Bank Account Today