The future value of $500 deposited into an account paying 8% annually for three years is:
A)$500.
B)$630.
C)$700.
D)$620.

Question

Quizplus · Accepted Answer

The formula for future value of a lump-sum investment is:

FV = PV x (1 + r)n

Where:
PV = present value
r = annual interest rate
n = number of years
FV = future value

Using this formula, we can calculate the future value of the $500 deposit:

FV = $500 x (1 + 0.08)3
FV = $630.05

Therefore, the correct answer is B) $630.

The Future Value of $500 Deposited into an Account Paying