To pay for her college education,Gina is saving $2,000 at the beginning of each year for the next eight years in a bank account paying 12 percent interest.How much will Gina have in that account at the end of 8th year?

Question

Quizplus · Accepted Answer

Gina is making a series of equal payments (an annuity) at the beginning of each year. The future value of an annuity due can be calculated using the formula: FV = P * [(1 + r)^n - 1] * (1 + r) / r, where P is the payment amount, r is the interest rate, and n is the number of periods. Plugging in the values: FV = $2,000 * [(1 + 0.12)^8 - 1] * (1 + 0.12) / 0.12, which results in approximately $27,551.

To Pay for Her College Education,Gina Is Saving $2,000 at the Beginning