If an IRA Is a Variable-Rate Investment for 20 Years

question 242

Multiple Choice

If an IRA is a variable-rate investment for 20 years at rate r percent per year, compounded monthly, then the future value S that accumulates from an initial investment of $4,000 is . What is the rate of change of S with respect to r and what does it tell us if the interest rate is 3%? Round your answer to two decimal places. ​

• A)The future value increases by approximately $1,547.37 when the interest rate increases from 3% to 4%.
• B)The future value increases by approximately $1,452.97 when the interest rate increases from 3% to 4%.
• C)The future value increases by approximately $3,141.04 when the interest rate increases from 3% to 4%.
• D)The future value increases by approximately $1,154.17 when the interest rate increases from 3% to 4%.
• E)The future value increases by approximately $2,627.64 when the interest rate increases from 3% to 4%.

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