Question

What is the future value of $1800 invested today at 18% interest in 30 years with interest compounded quarterly?
A. $300,154.84
B. $9.15
C. $354,182.71
D. $258,067.15
E. $394,832.66

Answer 1

Answer:

Future value of amount will be $354182.711

So option (C) will be the correct option

Explanation:

We have given present value $P= 1800$

Rate of interest r = 18 %

Time t = 30 years

As interest is paid quarterly so

Rate of interest $r=\frac{18}{4}=4.5%$

And time period = 30×4 = 120

Future value is given by $A=P(1+\frac{r}{100})^n=1800\times (1+\frac{4.5}{100})^{120}=1800\times 196.768= 354182.711$

So future value of amount will be $354182.711

So option (C) will be the correct option