Courtney invests $1,200 today. If she can earn a 13.25% rate of return for the next two years, how much money will she have at the end of the two years?

A) $1,203.18
B) $1,232.01
C) $1,359.00
D) $1,539.07
E) $1,742.99

Question

Stefan Lenzarini · Accepted Answer

Final Answer : D, Explanation :   To calculate the future value of Courtney's investment, we use the formula for compound interest:   F V = P V ( 1 + r ) n FV = PV(1 + r)^n F V = P V ( 1 + r ) n  , where   F V FV F V   is the future value,   P V PV P V   is the present value or initial investment,   r r r   is the annual interest rate, and   n n n   is the number of periods. Plugging in Courtney's values:   F V = 1200 ( 1 + 0.1325 ) 2 = 1200 ( 1.1325 ) 2 = 1200 ( 1.28270125 ) = 1539.24 FV = 1200(1 + 0.1325)^2 = 1200(1.1325)^2 = 1200(1.28270125) = 1539.24 F V = 1200 ( 1 + 0.1325 ) 2 = 1200 ( 1.1325 ) 2 = 1200 ( 1.28270125 ) = 1539.24  . Rounding to two decimal places gives us $1,539.07.

Courtney invests $1,200 today. If she can earn a 13.25% rate of return for the next two years, how much money will she have at the end of the two years?

A) $1,203.18
B) $1,232.01
C) $1,359.00
D) $1,539.07
E) $1,742.99

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Learning Objectives

Related questions

Courtney invests $1,200 today. If she can earn a 13.25% rate of return for the next two years, how much money will she have at the end of the two years?A) $1,203.18B) $1,232.01C) $1,359.00D) $1,539.07E) $1,742.99

Definitions

Learning Objectives

Learning Objectives

Related questions

Courtney invests $1,200 today. If she can earn a 13.25% rate of return for the next two years, how much money will she have at the end of the two years?

A) $1,203.18
B) $1,232.01
C) $1,359.00
D) $1,539.07
E) $1,742.99