Solve the Problem

Solve the problem. Refer to the table if necessary.
-Greg plans to contribute $500 per year to a retirement plan and is debating the use of a certificate of deposit that pays 2% per year versus a stock fund that he believes will yield 6% per year. Find the future value after 15 years of the CD and the stock fund.

A) CD: $8,646.71
Stock fund: $11,637.99
B) CD: $8,646.71
Stock fund: $13,576.06
C) CD: $7,986.97
Stock fund: $11,637.99
D) CD: $8,341.07
Stock fund: $10,789.28

Correct Answer:

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