Terri and Larry plan to invest $5,000 at the end of each year in an individual retirement account earning a rate of return of 11% compounded annually. What will be the value of the account after 15 years?
A) $119,864
B) $172,027
C) $198,215
D) $214,739
E) $359,543

Question

Quizplus · Accepted Answer

The value of the account after 15 years can be calculated using the future value of an annuity formula: FV = P * [((1 + r)^n - 1) / r], where P is the payment amount, r is the annual interest rate, and n is the number of periods. Plugging in the values: FV = $5,000 * [((1 + 0.11)^15 - 1) / 0.11] = $172,027.

Terri and Larry Plan to Invest $5,000 at the End