The future value of an $11,600 investment at the end of 5 years with an interest rate of 12% compounded quarterly is:
A)$20,442.68
B)$18,560.00
C)$20,950.89
D)$ 6,581.84

Question

Quizplus · Accepted Answer

We can use the formula for compound interest to find the future value:
FV = P(1 + r/n)^(nt)
where:
P = $11,600 (the principal)
r = 0.12 (the interest rate as a decimal)
n = 4 (compounded quarterly, so 4 times per year)
t = 5 (the number of years)

Plugging in these values, we get:
FV = 11,600(1 + 0.12/4)^(4*5)
FV = 11,600(1.03)^20
FV = $20,950.89

Therefore, choice C is the best option.

The Future Value of an $11,600 Investment at the End