Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 27 - Part IX - The Basic Tools of Finance - Quick Check Multiple Choice - Page 582: 2

Answer

d. \$121.

Work Step by Step

The formula for the future value is $(1+r)^N \times X$, where $r$ is the interest rate, $N$ is the number of years, and $X$ is the present value. $r = 0.1$ $N = 2$ $X = 100$ $(1+0.1)^2 \times 100 = 1.21 \times 100 = 121$ The future value is \$121.
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