If an investment of €1,000 made today grows at 3% per annun over the next 15 years, what amount will it have accumulated to after 15 years, using the supplied factors?

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Prepare for the Qualified Financial Adviser Exam 2 with flashcards and multiple choice questions, complete with hints and explanations. Get exam-ready and increase your confidence with our comprehensive study materials!

Multiple Choice

If an investment of €1,000 made today grows at 3% per annun over the next 15 years, what amount will it have accumulated to after 15 years, using the supplied factors?

Explanation:
Money grows by compounding at a fixed annual rate, so you multiply the initial amount by the accumulation factor for the period. For 15 years at 3% per year, the factor is (1.03)^15, which is about 1.558. So €1,000 × 1.558 ≈ €1,558. Using the supplied factors, the 15-year factor at 3% is 1.558, giving €1,000 × 1.558 = €1,558. The other amounts would require different time horizons or rates, not the 15-year at 3% case.

Money grows by compounding at a fixed annual rate, so you multiply the initial amount by the accumulation factor for the period. For 15 years at 3% per year, the factor is (1.03)^15, which is about 1.558. So €1,000 × 1.558 ≈ €1,558. Using the supplied factors, the 15-year factor at 3% is 1.558, giving €1,000 × 1.558 = €1,558. The other amounts would require different time horizons or rates, not the 15-year at 3% case.

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