If the interest rate is 4% and the average inflation rate is 2%, what is the approximate future value of $15,000 in 10 years?
A)$15,900
B)$17,949
C)$18,285
D)$22,204

Question

Quizplus · Accepted Answer

To calculate the future value, we can use the formula:
FV = PV x (1 + r)n
where:
PV = present value = $15,000
r = interest rate - inflation rate = 4% - 2% = 2%
n = number of years = 10

Plugging in the values, we get:
FV = $15,000 x (1 + 0.02)10
FV = $15,000 x 1.219
FV = $18,285

Therefore, the approximate future value of $15,000 in 10 years is $18,285. Option C is correct.

If the Interest Rate Is 4% and the Average Inflation