Solve the problem.
-If Bob deposits $5000 at the end of each year for 6 years in an account paying 8% interest compounded annually, find the amount he will have on deposit.

Question

Solve the problem. 
-If Bob deposits $5000 at the end of each year for 6 years in an account paying 8% interest compounded annually, find the amount he will have on deposit.

Quizplus · Accepted Answer

Bob is making a series of equal annual deposits, which is an example of an annuity. The future value of an annuity can be calculated using the formula $FV = P \times \frac{(1 + r)^n - 1}{r}$, where $P$ is the annual payment, $r$ is the annual interest rate, and $n$ is the number of payments. Plugging in the values ($P = 5000$, $r = 0.08$, $n = 6$), we get $FV = 5000 \times \frac{(1 + 0.08)^6 - 1}{0.08}$, which calculates to approximately $36,679.65.

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