If the interest rate is 6.9% per annum,compounded annually,what is the future value of a five-year ordinary annuity with yearly payments of $4000?
A) $5584.04
B) $18 709.07
C) $22 957.10
D) $30 984.06

Question

Quizplus · Accepted Answer

To solve this problem, we can use the future value of an ordinary annuity formula, which is:

FV = Pmt x ((1 + r)^n - 1) / r

Where:
- FV is the future value of the annuity
- Pmt is the yearly payment
- r is the interest rate per period (in this case, per year)
- n is the number of periods (in this case, years)

Plugging in the numbers, we get:

FV = $4000 x ((1 + 0.069)^5 - 1) / 0.069
FV = $22,957.10

Therefore, the best choice is C: $22,957.10.

If the Interest Rate Is 6