Your aunt places $13,000 into an account earning an interest rate of 7% per year

Question

Your aunt places $13,000 into an account earning an interest rate of 7% per year. After 5 years the account will be valued at $18,233.17. Which of the following statements is correct?

a. The principal is $13,000, the time period is 7 years, the future value is $18,233.17, and the interest rate is 5%.

b. The present value is $13,000, the time period is 7 years, the present value is $18,233.17, and the interest rate is 5%.

c. The principal is $13,000, the time period is 5 years, the future value is $18,233.17, and the interest rate is 7%.

d. The future value is $13,000, the time period is 5 years, the principal is $18,233.17, and the interest rate is 7%.

Explanation / Answer

c. The principal is $13,000, the time period is 5 years, the future value is $18,233.17, and the interest rate is 7%

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