Find the value of the annuity at the end of the indicated number of years. Assume that the interest is compounded with the same frequency as the deposit.
A) $77,717.44
B) $76,123.47
C) $76,691.15
D) $78,069.56
E) $57,068.70

Question

Find the value of the annuity at the end of the indicated number of years. Assume that the interest is compounded with the same frequency as the deposit. ​ 
A) $77,717.44 
B) $76,123.47 
C) $76,691.15 
D) $78,069.56 
E) $57,068.70

Quizplus · Accepted Answer

We can use the formula for the future value of an annuity to solve this problem. FV = Pmt x [(1 + r/n)^(n x t) - 1] / (r/n), where Pmt is the periodic deposit, r is the interest rate, n is the number of compounding periods in a year, and t is the number of years. Plugging in the given values, we get: FV = 7000 x [(1 + 0.07/12)^(12 x 10) - 1] / (0.07/12) = $76,691.15. Therefore, the best choice is C.

Find the Value of the Annuity at the End of the Indicated