Homework Answers
Answer a.
Amount invested = $500
Interest rate = 8%
Period = 15 years
Future value = Amount invested * (1 + Interest
rate)^Period
Future value = $500 * 1.08^15
Future value = $500 * 3.172169
Future value = $1,586.08
Answer b.
Amount invested = $500
Interest rate = 8%
Period = 15 years
Future value = Amount invested * (1 + Interest rate *
Period)
Future value = $500 * (1 + 0.08 * 15)
Future value = $500 * 2.20
Future value = $1,100.00
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