BC Canada HLLQP Life Insurance Practice Exam

To determine the future value of Ming Lee's investment, we can apply the future value formula for compound interest. The formula is:

\[ FV = P(1 + r)^n \]

Where:

- \( FV \) is the future value of the investment,

- \( P \) is the principal amount (the initial amount of money),

- \( r \) is the annual interest rate (expressed as a decimal),

- \( n \) is the number of years the money is invested for.

Given:

- \( P = 13,000 \)

- \( r = 0.05 \) (which is 5% expressed as a decimal)

- \( n = 7 \)

Substituting these values into the formula:

\[ FV = 13,000(1 + 0.05)^7 \]

Calculating inside the parentheses first:

\[ FV = 13,000(1.05)^7 \]

Next, we calculate \( (1.05)^7 \):

\[ (1.05)^7 \approx 1.4071 \]

Now, we can finish the calculation:

\[ FV = 13,000 \times 1.4071 \]

\[ FV \approx