Which of the following comes closest to the value at the end of year 6 of investing $600 today (year 0) and then investing another $600 at the end of year 5 if the interest rate is 3%?

a. $ 1,434

b. $ 1,334

c. $ 1,542

d. $ 1,383

e. $ 1,487

Question

Rylee Key

Business

10 May, 02:11

Which of the following comes closest to the value at the end of year 6 of investing $600 today (year 0) and then investing another $600 at the end of year 5 if the interest rate is 3%?

a. $ 1,434

b. $ 1,334

c. $ 1,542

d. $ 1,383

e. $ 1,487

+1

Answers (1)

Know the Answer?

Zaniyah Montgomery · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Investment = $600 today and $600 at the end of year 5

Interest rate = 3%

To calculate the final value, we need to apply the following formula on each investment:

FV = PV * (1+i) ^n

FV = 600 * (1.03^6) = $716.43

FV = 600 * (1.03^1) = $618

Total FV = $1,334.43

Which of the following comes closest to the value at the end of year 6 of investing $600 today (year 0) and then investing another $600 at the end of year 5 if the interest rate is 3%?a. $ 1,434b. $ 1,334c. $ 1,542d. $ 1,383e. $ 1,487

Which of the following comes closest to the value at the end of year 6 of investing $600 today (year 0) and then investing another $600 at the end of year 5 if the interest rate is 3%?

a. $ 1,434

b. $ 1,334

c. $ 1,542

d. $ 1,383

e. $ 1,487