$10,000 is invested at an annual interest rate of 7% for 5 years. Find the future value of the investment, rounded to the nearest hundredth, if the interest is compounded monthly.
A) $14,176.25
B) $14,176.26
C) $99,508.86
D) $99,508.87
E) None of these

Question

Quizplus · Accepted Answer

The future value is calculated using the formula for compound interest: $ FV = P(1 + \frac{r}{n})^{nt} $, where $ P = 10000 $, $ r = 0.07 $, $ n = 12 $, and $ t = 5 $. Plugging in these values gives $ FV = 10000(1 + \frac{0.07}{12})^{12 \times 5} \approx 14176.25 $.

$10,000 Is Invested at an Annual Interest Rate of 7