Kristina started setting aside funds three years ago to save for a down payment on a house.She has saved $900 each quarter and earned an average rate of return of 4.8 percent.How much money does she currently have saved?

Question

Quizplus · Accepted Answer

The correct answer is A.The amount of money Kristina has saved can be calculated using the formula for the future value of an annuity:FV = P * [(1 + r/n)^(n*t) - 1] / (r/n)where:P is the amount of money saved each quarter ($900)r is the annual rate of return (4.8%)n is the number of times per year that the money is saved (4)t is the number of years that the money has been saved (3)Plugging these values into the formula, we get:FV = 900 * [(1 + 0.048/4)^(4*3) - 1] / (0.048/4)= 900 * [(1.012)^12 - 1] / 0.012= 900 * [1.136 - 1] / 0.012= 900 * 0.136 / 0.012= 11,542.10Therefore, Kristina currently has $11,542.10 saved.

Kristina Started Setting Aside Funds Three Years Ago to Save