You want to go to Europe 5 years from now,and you can save $3,100 per year,beginning one year from today.You plan to deposit the funds in a mutual fund that you think will return 8.5% per year.Under these conditions,how much would you have just after you make the 5th deposit,5 years from now?
A)$18,369
B)$19,287
C)$20,251
D)$21,264
E)$22,327

Question

Quizplus · Accepted Answer

The correct answer is A because the future value of the annuity can be calculated using the formula FV = P * ((1 + r)^n - 1) / r, where P is the annual deposit, r is the annual interest rate, and n is the number of years. Plugging in the given values, we get FV = 3100 * ((1 + 0.085)^5 - 1) / 0.085 = 18369.02.

You Want to Go to Europe 5 Years from Now,and