If you put $1,000 in the bank today at an interest rate of 6% what is its value in two years? A)$2,000(1.06) B)$1,000 + $(1.06)² C)$1,000(1.06)² D)None of the above are correct.

Question

Quizplus · Accepted Answer

To find the value of the investment after two years with an interest rate of 6%, we can use the formula:

Value after two years = Initial investment x (1 + interest rate)^time

Plugging in the values, we get:

Value after two years = $1,000 x (1 + 0.06)^2 = $1,000 x 1.1236 = $1,123.60

Therefore, the best choice is C: $1,000(1.06)^2.

If You Put $1,000 in the Bank Today at an Interest