Question

Jorgen Grace made deposits of $250 at the end of each year for 12 years. The rate received was 6% annually. What is the value of the investment after 12 years? $2,028 $3,000 $4,217.48 $4,200 None of these

Answer 1

As given, Amount or A = 250

Time period = 12 years or n=12

Interest = 6% or i=0.06

Value of the investment = $A[((1+i)^{n}-1)/i]$

= $250[((1+0.06)^{12}-1)/0.06]$

= $250[((1.06)^{12}-1)/0.06]$

= $250[(2.0121-1)/0.06]$

= $250(16.869)$ = 4217.25 which is near to $4217.48

Hence, option C = $4217.48 is the answer.