Question

"florence deposits $4,000 at the end of each year in an account earning 2.35% interest, compounded annually. what is the future value of this annuity after 5 years of investing?"

Answer 1

Answer:

$20,962.35

Step-by-step explanation:

To solve for the amount of money the account of Florence will have, we use the formula:

$FV=P[\dfrac{(1+r)^{n}-1}{r}]$

Our available variables are:

P = 4000

n = 5

r = 2.35% or 0.0235

Now let's plug them into the formula.

$FV=4000[\dfrac{(1+0.0235)^{5}-1}{0.0235}]$

$FV=4000[\dfrac{(1.0235)^{5}-1}{0.0235}]$

$FV=4000[5.2405876943550625]$

$FV=20962.35$