The future value of $1,000 invested each of the next five years with interest compounded annually at an interest rate of 5 percent per year is
A) $5,250.00
B) $6,250.00
C) $5,525.60
D) None of the above

Question

Quizplus · Accepted Answer

The future value of a series of investments can be calculated using the formula for the future value of an annuity. The formula is FV = P * [(1 + r)^n - 1] / r, where P is the payment amount, r is the annual interest rate, and n is the number of periods. Plugging in the values ($1,000 for P, 0.05 for r, and 5 for n), we get FV = $1,000 * [(1 + 0.05)^5 - 1] / 0.05 = $5,525.63, which rounds to $5,525.60, making option C the correct answer.

The Future Value of $1,000 Invested Each of the Next