You want to quit your job and return to school for an MBA degree 3 years from now,and you plan to save $5,600 per year,beginning immediately.You will make 3 deposits in an account that pays 5.2% interest.Under these assumptions,how much will you have 3 years from today?
A) $18,608.56
B) $21,772.01
C) $16,747.70
D) $15,259.02
E) $22,516.35

Question

Quizplus · Accepted Answer

The correct calculation involves finding the future value of an annuity, where you make regular deposits (in this case, $5,600 per year) into an account that earns interest (5.2% annually). The formula for the future value of an annuity is FV = P * [((1 + r)^n - 1) / r], where P is the payment amount, r is the annual interest rate, and n is the number of periods. Here, P = $5,600, r = 0.052, and n = 3. Plugging these values into the formula gives FV = $5,600 * [((1 + 0.052)^3 - 1) / 0.052] = $18,608.56.

You Want to Quit Your Job and Return to School