The Future Value of $200 That Is Left in Account

question 15

Multiple Choice

The future value of $200 that is left in account earning 6.5% interest for three years is best expressed by which of the following?

• A)$200(1.065) x 3
• B)$200(1.065)/3
• C)$200(1.065)n
• D)$200(1.065)3

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Definitions:

Initial Investment

The initial amount of money required to start a project, investment, or business, often used to assess its feasibility and potential return.

Negative Cash Flow

A situation where a business or individual's outflows of cash exceed their incoming cash, indicating potential financial trouble.

Modified Internal Rate of Return (MIRR)

A financial metric that measures the profitability of an investment, taking into account the cost of capital and the reinvestment of cash flows.

Net Present Value (NPV)

A financial metric that calculates the value of a projected investment by estimating the present value of its future cash flows minus the initial investment cost.