Kristen deposits $5,000 in the bank at the end of each year for five years. How much money will she have in the bank at the end of five years, assuming she will be earning 6% interest annually on her deposits? (Round to the nearest dollar).
A) $3,736
B) $6,691
C) $28,186
D) $21,062

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used here: FV = P * [((1 + r)^n - 1) / r], where P is the annual deposit ($5,000), r is the interest rate (0.06), and n is the number of years (5). Plugging in the values, FV = 5000 * [((1 + 0.06)^5 - 1) / 0.06] = $28,186.

Kristen Deposits $5,000 in the Bank at the End of Each