Final answer:
To find the future value of Kurt's investment, we calculate interest over two periods with different rates. The total after 2 years at 3% interest is $530, and after 5 years with the last 3 years at 5% interest is $609.50, which was not one of the given options.
Step-by-step explanation:
To calculate the future value of Kurt's investment, we need to account for the changing interest rates over the five-year period. For the first two years, the interest rate is 3%, and for the last three years, it is 5%. Since the interest is not compounded, we will calculate the amount of interest separately for the two periods and then sum it up to find the total future value.
For the first two years at 3% interest per year:
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- Interest for first two years = Principal × rate × time
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- Interest for first two years = $500 × 0.03 × 2
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- Interest for first two years = $30
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- New principal after two years = $500 + $30 = $530
For the last three years at 5% interest per year on the new principal:
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- Interest for last three years = New principal × rate × time
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- Interest for last three years = $530 × 0.05 × 3
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- Interest for last three years = $79.50
Total future value after five years = New principal after two years + Interest for last three years
Total future value after five years = $530 + $79.50 = $609.50
However, the correct option $609.50 was not listed among the choices given in the question, and in a real-life scenario, Kurt would have to double-check the available choices or the terms of his investment. It's also worth noting that the final amount might also be affected by the frequency of compounding interest, if any, and any potential taxes or fees that could be associated with the investment.