If you invest $1,200 at the end of every year for five years at an interest rate of 10%, the balance of your investment in 5 years will be closest to

Question

Quizplus · Accepted Answer

To solve this problem, we can use the formula for the future value of an annuity:

FV = PMT x ((1+i)^n - 1)/i

where:
PMT = payment amount per period (in this case, $1,200 per year)
i = interest rate per period (in this case, 10% per year)
n = number of periods (in this case, 5 years)

Plugging in the numbers, we get:

FV = $1,200 x ((1+0.1)^5 - 1)/0.1 = $7,326

Therefore, the closest answer choice is (C) $7,326.

If You Invest $1,200 at the End of Every Year