If the current rate of interest is 8%,then the future value 20 years from now of an investment that pays $1000 per year and lasts 20 years is closest to:
A)$45,762.
B)$36,725.
C)$9818.
D)$93,219.

Question

Quizplus · Accepted Answer

We can use the formula for the future value of an annuity:

FV = PMT * ((1 + r)^n - 1) / r

Where:
PMT = the annual payment
r = the interest rate per period (in this case, 8% per year)
n = the number of periods (in this case, 20 years)

Plugging in the values, we get:

FV = 1000 * ((1 + 0.08)^20 - 1) / 0.08
FV = $45,762.34

Therefore, the closest answer choice is A) $45,762.

If the Current Rate of Interest Is 8%,then the Future