SCI Company deposits $15,000 in a fund at the end of each year for 7 years. The fund pays interest of 3% compounded annually. The balance in the fund at the end of 7 years is computed by multiplying
A) $15,000 by the future value of 1 factor.
B) $75,000 by 1.07.
C) $75,000 by 1.70.
D) $15,000 by the future value of an annuity factor.

Question

Quizplus · Accepted Answer

The balance is calculated using the future value of an annuity factor because the deposits are made at the end of each year, forming an annuity.

SCI Company Deposits $15,000 in a Fund at the End