Your department at work places $8,000 every year-end into an account earning 5%.The money is used when the corporate office fails to fully finance your profitable projects.The money has not been touched since the first deposit was made exactly six years ago.If the most recent deposit was made today,how much money is currently in the account?
A)$55,256.31
B)$60,000.00
C)$65,136.07
D)$68,019.13

Question

Quizplus · Accepted Answer

The interest rate is 5%. We can use the formula for future value of an annuity:

FV = Pmt * [((1 + r)^n - 1) / r]

Where FV is the future value, Pmt is the annual payment, r is the annual interest rate, and n is the number of years.

Using the formula, we get:

FV = 8,000 * [((1 + 0.05)^6 - 1) / 0.05] = $48,845.48

Adding the most recent deposit of $8,000, we get:

FV = $48,845.48 + $8,000 = $56,845.48

Thus, the closest answer is C: $65,136.07.

Your Department at Work Places $8,000 Every Year-End into an Account