Use the following 8% interest factors for questions 102 through 105.
-What will be the balance on September 1, 2020 in a fund which is accumulated by making $20,000 annual deposits each September 1 beginning in 2013, with the last deposit being made on September 1, 2020? The fund pays interest at 8% compounded annually.
A) $212,733
B) $178,458
C) $151,200
D) $114,932

Question

Use the following 8% interest factors for questions 102 through 105. 
-What will be the balance on September 1, 2020 in a fund which is accumulated by making $20,000 annual deposits each September 1 beginning in 2013, with the last deposit being made on September 1, 2020? The fund pays interest at 8% compounded annually.
A) $212,733 
B) $178,458 
C) $151,200 
D) $114,932

Quizplus · Accepted Answer

Step 1: Calculate the accumulated value of the annual deposits made from September 1, 2013, to September 1, 2019, using the 8% interest factor:
$20,000 x [(1 + 0.08)^7 - 1] / 0.08 = $166,299.08
Step 2: Calculate the future value of the last deposit made on September 1, 2020, using the 8% interest factor:
$20,000 x (1 + 0.08) = $21,600
Step 3: Calculate the total accumulated value on September 1, 2020, by adding the accumulated value of deposits made from 2013 to 2019 and the future value of the last deposit made in 2020:
$166,299.08 + $21,600 = $187,899.08
Step 4: Calculate the interest earned on the fund from September 1, 2019, to September 1, 2020, using the 8% interest factor:
$187,899.08 x 0.08 = $15,031.92
Step 5: Calculate the balance on September 1, 2020, by adding the interest earned to the total accumulated value:
$187,899.08 + $15,031.92 = $202,931
Therefore, the answer is A) $212,733, which is the nearest option to $202,931.

Use the Following 8% Interest Factors for Questions 102 Through