Juan Vinson is planning to buy a house in five years. He is looking to invest $25,000 today in an index mutual fund that will provide him a return of 12 percent annually. How much will he have at the end of five years? (Round to the nearest dollar.)
A) $45,000
B) $28,000
C) $44,059
D) $28,530

Question

Quizplus · Accepted Answer

To calculate the future value of $25,000 invested today at a 12% annual return, we can use the formula: 
Future value = Present value x (1 + rate of return)^number of years 
Plugging in the numbers, we get: 
Future value = $25,000 x (1 + 0.12)^5 = $44,059. 
Therefore, Juan will have $44,059 at the end of five years. So, the best choice is C.

Juan Vinson Is Planning to Buy a House in Five