Luke believes that he can invest $5,000 per year for his retirement in 30 years. How much will he have available for retirement if he can earn 8% on his investment?
A) $566,400
B) $681,550
C) $150,000
D) $162,000

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used here: FV = Pmt * [((1 + r)^n - 1) / r], where Pmt = $5,000, r = 0.08, and n = 30. Plugging in these values, FV = $5,000 * [((1 + 0.08)^30 - 1) / 0.08] = $566,400.

Luke Believes That He Can Invest $5,000 Per Year for His