Which amount would €1,000 grow to after 15 years, at 3% per annum, based on the example?

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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

Which amount would €1,000 grow to after 15 years, at 3% per annum, based on the example?

Explanation:
This question is about how money grows with compound interest at a fixed annual rate. The future value after t years is the present value multiplied by (1 + r)^t, where r is the annual rate. Here, €1,000 grows at 3% per year for 15 years. So the future value is 1000 × (1.03)^15. Calculating (1.03)^15 gives about 1.558, so the amount is roughly €1,558. Therefore, the correct value is about €1,558. It corresponds to the option showing €1,558. The other numbers would come from using a shorter or longer time frame or a different rate, not 15 years at 3%.

This question is about how money grows with compound interest at a fixed annual rate. The future value after t years is the present value multiplied by (1 + r)^t, where r is the annual rate.

Here, €1,000 grows at 3% per year for 15 years. So the future value is 1000 × (1.03)^15. Calculating (1.03)^15 gives about 1.558, so the amount is roughly €1,558.

Therefore, the correct value is about €1,558. It corresponds to the option showing €1,558. The other numbers would come from using a shorter or longer time frame or a different rate, not 15 years at 3%.

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