Question: $15,000 at 15% compounded annually for 5 years
A. $28,500.000
B. $30,170.36
C. $17.250.00ОО
D. $26,250.45
Answer: B. $30,170.36
To calculate the future value of $15,000 invested at 15% interest rate compounded annually for 5 years, we use the compound interest formula: FV = P((1 + r/n))^(nt), with FV the amount to be received in the future, P the initial principal amount, r the annual rate of interest, n the number of times the interest is compounded per year (in this case 1 per year so, n = 1), and t time, in years.
The $15,000 will become 30,170.36 when compounded annually 15% of an initial investment. This equation shows how the power of compounding can work on your behalf and over time, by having the interest earned for the past year added to the principal amount and the next year’s interest calculations will be based on a new, increased principal amount (Brainly.com, 2024).
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