What is the approximate future value of $500 invested today for 18 years at 6%?

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Multiple Choice

What is the approximate future value of $500 invested today for 18 years at 6%?

Explanation:
When money earns interest with compounding, the future value is found by multiplying the present value by (1 + rate) raised to the number of years. So here, the future value is approximately 500 × (1.06)^18. Compute (1.06)^18 ≈ 2.854. Multiply by 500 to get about 1427. Therefore the closest value is 1,427. The other numbers are less close because they correspond to factors notably different from 2.854.

When money earns interest with compounding, the future value is found by multiplying the present value by (1 + rate) raised to the number of years. So here, the future value is approximately 500 × (1.06)^18.

Compute (1.06)^18 ≈ 2.854. Multiply by 500 to get about 1427. Therefore the closest value is 1,427.

The other numbers are less close because they correspond to factors notably different from 2.854.

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