To calculate the future value of an initial investment of $250 with a 5% interest rate, we can use the formula for compound interest:
Future Value = Initial Investment * (1 + Interest Rate)^n
Where:
Initial Investment = $250
Interest Rate = 5% = 0.05
n = Number of periods
Let's assume we want to calculate the future value after 3 years:
Future Value = $250 * (1 + 0.05)^3
Calculating:
Future Value = $250 * (1.05)^3
= $250 * 1.157625
= $289.41 (rounded to two decimal places)
Therefore, the future value of an initial investment of $250 with a 5% interest rate after 3 years is approximately $289.41.