On January 1, 2007, Carly Company decided to begin accumulating a fund for asset replacement five years later.The company plans to make five annual deposits of $50,000 at 9% each January 1 beginning in 2007.What will be the balance in the fund, within $10, on January 1, 2012 (one year after the last deposit)? The following 9% interest factors may be used. $\begin{array}{lll}
&\text { Present Value of}&\text {Future Value of }\&\text {Ordinary Annuity }&\text {Ordinary Annuity }\
\hline 4 \text { periods } & 3.2397 & 4.5731 \
5 \text { periods } & 3.8897 & 5.9847 \
6 \text { periods } & 4.4859 & 7.5233
\end{array}$

Question

On January 1, 2007, Carly Company decided to begin accumulating a fund for asset replacement five years later.The company plans to make five annual deposits of $50,000 at 9% each January 1 beginning in 2007.What will be the balance in the fund, within $10, on January 1, 2012 (one year after the last deposit)? The following 9% interest factors may be used. $\begin{array}{lll}
&\text { Present Value of}&\text {Future Value of  }\&\text {Ordinary Annuity }&\text {Ordinary Annuity }\
\hline 4 \text { periods } & 3.2397 & 4.5731 \
5 \text { periods } & 3.8897 & 5.9847 \
6 \text { periods } & 4.4859 & 7.5233
\end{array}$

Quizplus · Accepted Answer

The future value of an ordinary annuity factor for 5 periods at 9% is 5.9847. Multiply this factor by the annual deposit amount of $50,000 to find the balance: $50,000 * 5.9847 = $299,235.

On January 1, 2007, Carly Company Decided to Begin Accumulating