If $\$ 1400$ is deposited in an ordinary annuity at the end of each quarter for $4 \mathrm{yr}$ and earns $3 \%$ interest compounded quarterly, how much will be in the account at the end of this term?
A) $\$ 23,705.19$
B) $\$ 5926.3$
C) $\$ 112,878.54$
D) $\$ 23,428.31$

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity can be calculated using the formula $FV = P \times \frac{(1 + r)^n - 1}{r}$, where $P$ is the payment per period, $r$ is the interest rate per period, and $n$ is the total number of payments. Here, $P = \$1400$, $r = 0.03/4 = 0.0075$ (since interest is compounded quarterly), and $n = 4 \times 4 = 16$ (4 years, 4 quarters each). Plugging these values into the formula gives $FV = \$1400 \times \frac{(1 + 0.0075)^{16} - 1}{0.0075} \approx \$23,705.19$.

If $1400\$ 1400$1400 Is Deposited in an Ordinary Annuity at the End of the End

If $\$ 1400$ Is Deposited in an Ordinary Annuity at the End of the End