Question

Aubree invested $500 into a mutual fund that paid 3% interest each year compounded annually. Find the value of the mutual fund in 12 years.

Answer 1

25%

Explanation:

Because she divided it

Answer 2

FV= $712.88

Explanation:

Giving the following information:

Initial investment (PV)= $500

Number of periods (n)= 12 years

Interest rate (i)= 3% compounded annually

To calculate the future value, we need to use the following formula:

FV= PV*(1+i)^n

FV= 500*(1.03^12)

FV= $712.88