Future Value of an Annuity
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To save money, you want to begin contributing money to a risky brokerage account. Your plan is to make 4 contributions to the brokerage account. Each contribution will be $5,000 and each will be made at the beginning of each quarter beginning now and until the end of the year (the first immediately and then every 3 months). Assume that the account pays an 8% quarterly return with monthly compounding. How much money do you expect to have in the account immediately after making the last deposit?
possible answers:
a)20,938.67 b)19,784.21 c)19,021.54
d)26,546.36 e)25,369,14 f)22,602.32
g)22,215.54 h)23,598.54 i)24,879.73
j)21,791.64
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Solution Summary
The solution calculates the Future Value of an Annuity.
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Answer: f)22,602.32
Quarterly interest rate= 8%
Therefore monthly interest rate with ...
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