Which of the following investments has a larger future value: A $100 investment earning 10% per year for 5 years or a $100 investment earning 5% per year for 10 years?
A) An investment of $100 invested at 10% per year for 5 years because it has a future value of $161.05.
B) An investment of $100 invested at 10% per year for 5 years because it has a future value of $162.89.
C) An investment of $100 invested at 5% per year for 10 years because it has a future value of $161.05.
D) An investment of $100 invested at 5% per year for 10 years because it has a future value of $162.89.
Answer: D
Explanation: D) FV = PV ∗ (1 + r)n = $100 ∗ (1.10)5 = $161.05 and $100 ∗ (1.05)10 = $162.89
MODE = END
INPUT 5 10 -100 0 ?
KEY N I/Y PV PMT FV
CPT 161.05
MODE = END
INPUT 10 5 -100 0 ?
KEY N I/Y PV PMT FV
CPT 162.89
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