A small business owner contributes $5,000 at the end of each quarter to a retirement account that earns an annual rate of 6% compounded quarterly. How long will it be until the account is worth $150,000?
A) 24.96 quarters
B) 43.11 quarters
C) 57.39 quarters
D) 69.15 quarters
E) 13.63 quarters

Question

A small business owner contributes $5,000 at the end of each quarter to a retirement account that earns an annual rate of 6% compounded quarterly. How long will it be until the account is worth $150,000? ​
A) 24.96 quarters
B) 43.11 quarters
C) 57.39 quarters
D) 69.15 quarters
E) 13.63 quarters

Quizplus · Accepted Answer

The correct answer is A because the account will be worth $150,000 after 24.96 quarters. This can be calculated using the formula A = P(1 + r/n)^(nt), where A is the future value of the account, P is the present value of the account, r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, P = $5,000, r = 6%, n = 4, and t = 24.96.

A Small Business Owner Contributes $5,000 at the End of Each