Eastinghome Inc. just paid $8,000 to a landowner to explore for but no

Eastinghome Inc. just paid $8,000 to a landowner to explore for but not extract valuable minerals. If the landowner invests the money at a rate of 5.5% compounded annually for 7 years what is the investment worth at the end of that time period?

A) $5,499.49
B) $11,637.43
C) $56,000.00
D) $66,135.15

ANSWER

B
Explanation: B) Via Calculator: N = 7, I = 5.5, PV = $8,000, Solve for FV = $11,637.43.