Question

What is the future value of $375 at an interest rate of 3 percent one year from today? a. $371.75 b. $393.33 c. $386.25 d. none of the above are correct to the nearest cent?

Answer 1

The future value of a current investment is calculated through the equation,
F = P x (1 + i)^n

where F is the present value, F is the future value, i is the nominal interest rate, and n is the number of years.

Substituting the known values,
F = ($375)(1 + 0.03)^1 = $386.25

Hence, the answer to this item is letter C.