You deposit in a fund 10 annual payments of $2,500 each beginning January 1, 2016, with the last deposit being made on January 1, 2025. How much will be in the fund on December 31, 2025, one year after the final payment, if the fund earns interest at 4% compounded annually?
A) $21,088
B) $28,957
C) $30,015
D) $31,216

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used to calculate the amount in the fund after the last deposit. The future value of the annuity is calculated at the end of 2025, one year after the last deposit, by compounding the future value of the annuity for one additional year at 4%.

You Deposit in a Fund 10 Annual Payments of $2,500