Vannoy Corporation will invest $50,000 every January 1st for the next six years (2015 - 2020).If Wagner will earn 12% on the investment, what amount will be in the investment fund on December 31, 2020?

Question

Quizplus · Accepted Answer

The future value of an annuity is calculated using the formula:FV = P * [(1 + r)^n - 1] / rwhere:P is the amount of each paymentr is the annual interest raten is the number of paymentsIn this case, P = $50,000, r = 12%, and n = 6. Plugging these values into the formula, we get:FV = $50,000 * [(1 + 0.12)^6 - 1] / 0.12= $50,000 * [2.0557 - 1] / 0.12= $50,000 * 1.0557 / 0.12= $205,570Therefore, the amount in the investment fund on December 31, 2020 will be $205,570.

Vannoy Corporation Will Invest $50,000 Every January 1st for the Next