Glenda deposits $4, 000 every three months for five years.The first deposit is made on March 31, 2010, and the last deposit is made on December 31, 2014.The fund earns 16%, and interest is compounded quarterly.How much money will Glenda have on December 31, 2014, immediately after her last deposit? Factors for future value of an annuity of $1 are $\text { For Values of } n \text { and } i$
$\begin{array}{ll}
n=5 ; i=16 \% & n=20 ; I=4 \% \
6.8771 & 29.7781
\end{array}$
A)$123, 876
B)$119, 112
C)$110, 034
D)$107, 508

Question

Quizplus · Accepted Answer

The correct answer is found by using the future value of an annuity formula, considering the quarterly deposits and the quarterly compounding interest rate. Since Glenda deposits $4,000 every three months for five years, there are a total of 20 periods (5 years * 4 quarters per year). The interest rate per quarter is 4% (16% annual rate divided by 4). Using the future value of an annuity factor for n=20 and i=4% from the table, which is 29.7781, the future value of Glenda's annuity can be calculated as $4,000 * 29.7781 = $119,112.

Glenda Deposits $4, 000 Every Three Months for Five Years For Values of n and i\text { For Values of } n \text { and } i For Values of n and i

Glenda Deposits $4, 000 Every Three Months for Five Years $\text { For Values of } n \text { and } i$