Answer:
D. $ 98,976.71
Explanation:
The formula for the future worth of the a present amount at compounding interest rate is given as:
FV = PV(1+r/n)^nt
where, (taking the age of 25 as present time and 50 years as future)
FV = Future Value = ?
PV = Present Value = $ 20,000
r = interest rate = 6.5% = 0.065
n = no. of periods within an year = 2
t = total no. of years passed = 50 - 25 = 25 years
Therefore,
FV = ($ 20,000)(1 + 0.065/2)^(2)(25)
FV = $ 98,976.71
Thus the correct answer is D. $ 98,976.71
