At an annual rate of return of 8%, what is the future worth of $100 at the end of four years a. $130 b. $132 c. $135...
At an annual rate of return of 8%, what is the future worth of $100 at the end of four years
a. $130
b. $132
c. $135
d. $136
e. $140
Homework Answers
Answer : The answer is option d.
Rate of interest (r) = 8% = 0.08
Principal (P) = $100
Time (t) = 4 years
n = Per year interest rate compounding time.
Future worth = A
Now,
A = P (1 + r/n)^nt
=> A = 100 (1 + 0.08/1)^(1 * 4)
=> A = 100 * 1.36
=> A = $136
Therefore, option d is correct.
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