A house is rented for $3,900 per quarter, with each quarter's rent payable in advance. If money is worth 5%, compounded quarterly, and the rent is deposited in an account, what is the future value of the rent for two years? Round your answer to the nearest cent.
A)$21,416.88
B)$148,966.10
C)$68,141.70
D)$44,109.26
E)$32,599.66

Question

A house is rented for $3,900 per quarter, with each quarter's rent payable in advance. If money is worth 5%, compounded quarterly, and the rent is deposited in an account, what is the future value of the rent for two years? Round your answer to the nearest cent. ​
A)$21,416.88
B)$148,966.10
C)$68,141.70
D)$44,109.26
E)$32,599.66

Quizplus · Accepted Answer

The future value of an annuity formula is used: FV = Pmt * [(1 + r)^nt - 1] / r, where Pmt = $3,900, r = 0.05/4, n = 4, t = 2. Calculating gives FV ≈ $32,599.66.

A House Is Rented for $3,900 Per Quarter, with Each