want to quit your job and return to school for an MBA degree 3 years from now, and you plan to save $7,000 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)$20,993
B)$22,098
C)$23,261
D)$24,424
E)$25,645

Question

Quizplus · Accepted Answer

The future value of an annuity due can be calculated using the formula FV = P * [(1 + r)^n - 1] * (1 + r) / r, where P is the annual payment, r is the interest rate, and n is the number of periods. Since the deposits are made at the beginning of each period, we use the annuity due formula. Plugging in the values: P = $7,000, r = 0.052, n = 3, we get FV = $7,000 * [(1 + 0.052)^3 - 1] * (1 + 0.052) / 0.052 = $23,261.

Want to Quit Your Job and Return to School for an MBA