An annual contribution of $3,000 to a retirement account that earns 6% will be worth approximately _____ in 20 years. (Use the table of future value annuity factors or a financial calculator. Round to the nearest whole dollar.)
A)$60,000
B)$96,780
C)$100,000
D)$110,360
E)$192,600

Question

Quizplus · Accepted Answer

To calculate the future value of an annuity (in this case, annual contributions to a retirement account), you can use the future value annuity formula: FV = P * [((1 + r)^n - 1) / r], where P is the payment amount, r is the annual interest rate (as a decimal), and n is the number of periods. Plugging in the values ($3,000 annual contribution, 6% interest rate, and 20 years), the calculation gives a future value of approximately $110,360.

An Annual Contribution of $3,000 to a Retirement Account That