If $1,000 Is Invested in an Account with 4% Interest

question 66

Multiple Choice

If $1,000 is invested in an account with 4% interest compounding yearly, what will the balance of the account be after 4 years? Please refer to the following Future Value table:
$$\begin{array} {| r | r | r | r | r | } \hline\begin{array} { l } \text { Future } \\\text { Value of } \\\text { \$1 }\end{array} & & & & \\\hline & 4 \% & 5 \% & 6 \% & 7 \% \\\hline 1 & 1.040 & 1.050 & 1.060 & 1.070 \\\hline 2 & 1.082 & 1.103 & 1.124 & 1.145 \\\hline 3 & 1.125 & 1.158 & 1.191 & 1.225 \\\hline 4 & 1.170 & 1.216 & 1.262 & 1.311 \\\hline 5 & 1.217 & 1.276 & 1.338 & 1.403 \\\hline 6 & 1.265 & 1.340 & 1.419 & 1.501 \\\hline\end{array}$$

• A) $1,218
• B) $1,170
• C) $1,040
• D) $1,240

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