Answer:
a. $1(1 + .05)^16
Explanation:
The discounting of an amount today at an interest rate for a specific period of time is given by
A = P(1 + r)^n
where
A = Future amount
P = present amount
r = rate in percent
n = time
Therefore, the future value of $1 put into an account that earns 5 percent interest for 16 years
= $1(1 + 0.05)^16
As P = $1, r = 5% and n = 16. Option a.
