Kevin Robertson would like to buy a condo in Florida in six years. He is looking to invest $75,000 today in a stock that is expected to earn a return of 18.3 percent annually. How much will he have at the end of six years? (Round to the nearest dollar.)
A) $205,575
B) $157,350
C) $184,681
D) $273,620

Question

Quizplus · Accepted Answer

To find the future value of Kevin's investment, we use the formula for compound interest: FV = PV(1 + r)^n, where FV is the future value, PV is the present value ($75,000), r is the annual interest rate (18.3% or 0.183), and n is the number of years (6). Plugging in the values, we get FV = $75,000(1 + 0.183)^6 ≈ $205,575 when rounded to the nearest dollar.

Kevin Robertson Would Like to Buy a Condo in Florida