The correct statement is that if an amount of $125 is invested for compounded interest of 18%, then such amount will become $179 in 2 years. So, the correct option is C.
The calculation of compound interest can be done by using the formula for compounded annuity and assuming that the amount is compounded daily.
The formula for calculation of compounded annuity is as follows,
[tex]\rm Compounded\ Annuity = P(1+ \dfrac{r}{100})^n^t[/tex]
Now putting the given values in the formula above, we get,
[tex]\rm Compounded\ Annuity = 125(1+0.18)^3^6^5^x ^2\\\\\rm Compounded\ Annuity =125\ x\ 1.432\\\\\rm Compounded\ Annuity = \$179.15[/tex]
So, the value of the annuity becomes $179.15 in two years.
Hence, the correct option is C that the amount of $125 is invested for compounded interest of 18%, then such amount will become $179 in 2 years.
Learn more about Compound Annuity here:
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