Daniel deposits $2,000 per year at the end of the year for the next 15 years into an IRA account that currently pays 7%. How much will Daniel have on deposit at the end of the 15 years?
A) $39,981
B) $46,753
C) $49,002
D) $50,258

Question

Quizplus · Accepted Answer

The future value of an annuity formula is used here: FV = Pmt * [((1 + r)^n - 1) / r], where Pmt = $2,000, r = 0.07, and n = 15. Plugging in these values, FV = 2000 * [((1 + 0.07)^15 - 1) / 0.07] = $50,258.

Daniel Deposits $2,000 Per Year at the End of the Year