Your employer gives you a stock bonus of $1,000 in your company at the beginning of each year.You plan to retire in 20 years.The stock has a growth rate of 15 percent per annum.What will the value of your gain on the stock be for the 20 years?
A)$52,035.00
B)$97,810.10
C)$82,443.60
D)none of the above

Question

Quizplus · Accepted Answer

The future value of a series of cash flows (stock bonuses) can be calculated using the future value of an annuity formula. The formula is FV = P * [((1 + r)^n - 1) / r], where P is the annual payment ($1,000), r is the growth rate (15% or 0.15), and n is the number of years (20). Plugging in the values gives FV = $1,000 * [((1 + 0.15)^20 - 1) / 0.15] = $97,810.10.

Your Employer Gives You a Stock Bonus of $1,000 in Your