An investor expects to receive 10 payments of $5,000 each made at the end of each period. If interest is compounded at 5% annually, what is the future value of these payments?
A)$3,069.55
B)$7,387.30
C)$38,608.65
D)$62,889.45

Question

Quizplus · Accepted Answer

The future value of an annuity can be calculated using the formula: FV = Pmt * [((1 + r)^n - 1) / r], where Pmt is the payment amount, r is the interest rate, and n is the number of periods. Plugging in the values: FV = $5,000 * [((1 + 0.05)^10 - 1) / 0.05] = $62,889.45.

An Investor Expects to Receive 10 Payments of $5,000 Each