If you deposit $2,500 at the end of each six months into an account which earns 5.5% interest compounded quarterly, how much will be in the account in ﬁve years?

Question

Quizplus · Accepted Answer

The correct answer is D because the future value of the annuity can be calculated using the formula: FV = P * ((1 + r/n)^(n*t) - 1) / (r/n), where P is the periodic payment, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years. In this case, P = $2,500, r = 5.5%, n = 4 (since the interest is compounded quarterly), and t = 5. Plugging these values into the formula, we get FV = $28,357.

If You Deposit $2,500 at the End of Each Six