How much can be accumulated for retirement if $2,000 is deposited annually, beginning one year from today, and the account earns 9 percent interest compounded annually for 40 years?
A)$87,200.00
B)$675,764.89
C)$736,583.73
D)$802,876.27 PV = 2000

Question

Quizplus · Accepted Answer

The future value of an annuity is calculated using the formula:FV = P * [(1 + r)^n - 1] / rwhere:P is the annual paymentr is the annual interest raten is the number of yearsIn this case, we have:P = $2,000r = 9% = 0.09n = 40Plugging these values into the formula, we get:FV = $2,000 * [(1 + 0.09)^40 - 1] / 0.09FV = $2,000 * [23.673 - 1] / 0.09FV = $2,000 * 22.673 / 0.09FV = $675,764.89Therefore, the correct answer is B) $675,764.89.

How Much Can Be Accumulated for Retirement If $2,000 Is