The future value of an ordinary annuity of $5,000 invested at 8% in 5 years would result in a value of:
A) $25,000
B) $7,345
C) $29,335
D) none of the above

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity can be calculated using the formula: FV = R x [(1 + i)^n - 1] / i, where R is the regular payment or annuity, i is the interest rate per period, and n is the number of periods. In this case, R = $5,000, i = 8% or 0.08, and n = 5. Plugging these values into the formula, we get:
FV = $5,000 x [(1 + 0.08)^5 - 1] / 0.08
FV = $29,335.05
Therefore, the correct answer is C: $29,335.

The Future Value of an Ordinary Annuity of $5,000 Invested