Find the future value of the annuity.
-To save for retirement, you decide to deposit $2500 into an IRA at the end of each year for the next 35 years. If the interest rate is 1% per year compounded annually, find the value of the IRA, rounded to the nearest dollar,
After 35 years.
A) $104,151
B) $228,023
C) $1042
D) $100,644

Question

Quizplus · Accepted Answer

The future value of an annuity can be calculated using the formula $FV = P \times \frac{(1 + r)^n - 1}{r}$, where $P$ is the payment amount, $r$ is the annual interest rate, and $n$ is the number of payments. Plugging in the given values: $FV = 2500 \times \frac{(1 + 0.01)^{35} - 1}{0.01}$, which rounds to approximately $104,151.

Find the Future Value of the Annuity