What amount received at the end of 15 years is equivalent to $100 received at the end of each year for 15 years if the interest rate is 12%?
A)$3,728
B)$4,042
C)$2,676
D)$547
E)$625

Question

Quizplus · Accepted Answer

The future value of an annuity is given by the formula:FV = PMT * [(1 + r)^n - 1] / rwhere:PMT is the payment amountr is the interest raten is the number of periodsIn this case, PMT = $100, r = 12%, and n = 15. Plugging these values into the formula, we get:FV = $100 * [(1 + 0.12)^15 - 1] / 0.12= $100 * [3.728 - 1] / 0.12= $100 * 2.728 / 0.12= $3,728Therefore, the amount received at the end of 15 years is equivalent to $3,728 received at the end of each year for 15 years if the interest rate is 12%.

What Amount Received at the End of 15 Years Is