Lisa wants to know how much savings she would accumulate in 15 years if she saves $2,000 per year and her savings earns 4% per year. She needs to determine the
A) present value of an annuity.
B) annuity amount.
C) future value of one specific dollar amount today.
D) future value of an annuity.

Question

Quizplus · Accepted Answer

The future value of an annuity calculation is used to determine how much a series of equal annual savings (in this case, $2,000 per year) will grow to at a certain interest rate (4% per year) over a specific period of time (15 years).

Lisa Wants to Know How Much Savings She Would Accumulate