Question

Brandon is looking to invest for retirement, which he hopes will be in 30 years. He is looking to invest $39,500 today in U.S. Treasury bonds that will earn interest at 2.50 percent annually. How much will he have at the end of 30 years? (Round to the nearest dollar.) a. $68,870 b. $76,055 c. $80,238 d. $92,451 e. $82,854

Answer 1

Answer:

e. $82,854

Explanation:

Assuming compounding occurs only once a year, the future value of a $39,500 investment for 30 years at a rate of 2.50% per year is determined by:

$FV = P*(1+r)^n\\FV = \ 39,500*(1+0.025)^{30}\\FV=\ 82,854$

At the end of 30 years, Brandon will have $82,854.

The answer is alternative e. $82,854