What Is the Future Value of $500 in 4 Years

question 15

Multiple Choice

What is the future value of $500 in 4 years that earns an annual interest rate of 3 percent?

• A)$559.12
• B)$568.67
• C)$562.75
• D)$560.25

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Definitions:

Interest Rate

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan's outstanding balance.

Consumption

The act of households consuming both goods and services.

Endowment

The total resources owned or provided by an entity, including tangible and intangible assets.

Intertemporal Indifference Curve

A graphical representation showing different combinations of consumption at two different points in time among which a consumer is indifferent, reflecting time preferences for consumption.