Financial Intelligence Quiz #1: Future Value of $500 in 20 Years

Want to know the future value of $500 in 20 years? Let me just start asking some questions to my readers via financial quizzes online published in this blog once in awhile. So, this is the first financial quiz to answer at Return On Investment blog. The second financial quiz can be read here. I hope you will still enjoy reading this blog.

Actually there are different types of blog post here knowing the point of views of my readers such as “ask the investors, ask the experts, ask the readers, and finally this one “financial quiz”.

This blog has post about future value or future worth of a lump sum investment capital or a monthly investment. I know you already my post about the future value of $50,000 one time investment in this blog. Therefore, you have the idea about the question for today. It’s all about knowing the future worth of an investment capital.

Financial Intelligence Quiz #1: Future Value of $500 in 20 Years

Here’s the financial intelligence quiz #1, calculate the future value of $500 if it’s invested in a mutual fund bond fund type that earns 5% interest per year. What is the amount of $500 after 20 years without compounding the interest earned?

A. $500,000
B. $10,000
C. $100,000
D. $150,000
E. $1,500

Update: Do you know that a $500 one time investment can turn into four thousand dollars after 20 years if it’s earning at least 12% per year? What if you have extra $5,000 and invest it that earns the same interest within 20 years? Your fifty thousand dollars can turn into $48,000 after 20 years. Just reminding you about the power of compound interest.

What if you are really a disciplined investor and you do the investing using dollar cost averaging (if you are in the other country, just change the currency). According to my simple compound interest guide, a $500 monthly investment within 20 years can give you a $432,000, if your investment is earning at least 12% per year.

Financial Intelligence Quiz #1: Future Value of $500 in 20 Years

Okay, to get the answer to this financial quiz, first, you have to compute the earned interest rate per year.

$500 Investment Capital X 5% = $25 per year.
Years Invested: 20 Years
This is just a basic question. Are you ready? Write your answer in the comment box below. You can write as many as you want until you get the correct answer.

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