You want to go to Europe 5 years from now,and you can save $3,100 per year,beginning 1 year from today.You plan to deposit the funds in a mutual fund that you expect to return 8.5% per year.Under these conditions,how much will you have just after you make the fifth deposit,5 years from now?
A)$18,368.66
B)$19,287.09
C)$20,251.44
D)$21,264.02

Question

Quizplus · Accepted Answer

The correct answer is A because the future value of the annuity can be calculated using the formula: FV = PMT * [(1 + r)^n - 1] / r, where PMT is the annual deposit, r is the annual interest rate, and n is the number of years. Plugging in the given values, we get: FV = 3100 * [(1 + 0.085)^5 - 1] / 0.085 = 18368.66.

You Want to Go to Europe 5 Years from Now,and