Suppose you invest $1000 into a mutual fund that is expected to earn a rate of return of 10%.The amount of money will you have in ten years is closest to which of the following? The amount you will have in 50 years is closest to which of the following?
A)$386;$9
B)$2594;$45,259
C)$2594;$117,391
D)$3138;$ 1,311,892

Question

Quizplus · Accepted Answer

Using the compound interest formula, we can calculate the amount of money you will have after 10 years:

A = P(1 + r/n)^(nt)
A = 1000(1 + 0.1/1)^(1*10)
A = $2,593.74

Therefore, we choose answer choice C.

For 50 years, we have:

A = 1000(1 + 0.1/1)^(1*50)
A = $117,391.13

Therefore, we choose answer choice C again.

Suppose You Invest $1000 into a Mutual Fund That Is