What is the future value of $15,000 invested today for the next 7 years if the interest rate is 17.5 percent,and the interest rate is compounded 12 times per year?
A)45,600.98
B)50,612.76
C)22,205.44
D)120,980.30
E)None of the above.

Question

Quizplus · Accepted Answer

We can use the formula for future value of a present sum with compound interest:

FV = PV x (1 + r/n)^(n*t)

Where:
PV = present value = $15,000
r = interest rate = 17.5% or 0.175
n = compounding periods per year = 12
t = number of years = 7

Plugging in the values, we get:

FV = $15,000 x (1 + 0.175/12)^(12*7)
FV = $50,612.76

Therefore, the future value of $15,000 invested today for the next 7 years at an interest rate of 17.5% compounded 12 times per year is $50,612.76.

What Is the Future Value of $15,000 Invested Today for the Next