The future value of $500 invested at the end of each of the next three years is $1,555 (assuming a 10% interest rate).

Question

Quizplus · Accepted Answer

The future value of an annuity (such as $500 invested at the end of each year) can be calculated using the formula FV = P * [((1 + r)^n - 1) / r], where P is the payment amount, r is the interest rate per period, and n is the number of periods. Using a 10% interest rate and 3 periods, the calculation does not result in $1,555.

The Future Value of $500 Invested at the End of Each