With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%
Calculation: $5,000 x 7.7156 = $38,578.

Question

Quizplus · Accepted Answer

The calculation is correct. Using the formula for future value of an annuity, which is FV = Pmt x (((1 + r)^n - 1) / r), where Pmt is the periodic payment (in this case, $5,000), r is the interest rate (10% or 0.1), and n is the number of periods (6 years or 6), we get:
FV = $5,000 x (((1 + 0.1)^6 - 1) / 0.1) = $38,578
Therefore, the statement is true.

With Deposits of $5,000 at the End of Each Year