Given below are the future value factors for 1 at 8% for one to five periods. Each of the items 48 to 51 is based on 8% interest compounded annually.

-What amount will be in a bank account three years from now if $6,000 is invested each year for four years with the first investment to be made today?
A)($6,000 × 1.260) + ($6,000 × 1.166) + ($6,000 × 1.080) + $6,000
B)$6,000 × 1.360 × 4
C)($6,000 × 1.080) + ($6,000 × 1.166) + ($6,000 × 1.260) + ($6,000 × 1.360)
D)$6,000 × 1.080 × 4

Question

Given below are the future value factors for 1 at 8% for one to five periods. Each of the items 48 to 51 is based on 8% interest compounded annually.

-What amount will be in a bank account three years from now if $6,000 is invested each year for four years with the first investment to be made today?
A)($6,000 × 1.260) + ($6,000 × 1.166) + ($6,000 × 1.080) + $6,000 
B)$6,000 × 1.360 × 4 
C)($6,000 × 1.080) + ($6,000 × 1.166) + ($6,000 × 1.260) + ($6,000 × 1.360) 
D)$6,000 × 1.080 × 4

Quizplus · Accepted Answer

The correct choice is A because it accounts for the present value of each $6,000 investment growing at a compound interest rate for the respective number of years until the end of the third year.

Given Below Are the Future Value Factors for 1 at 8