Assume that you invest $750 at the end of each quarter for the next 20 years in a mutual fund. The annual rate of interest that you expect to earn in this account is 5.25 percent. The amount in the account at the end of 20 years is
A) $60,000.00.
B) $105,039.84.
C) $37,009.35.
D) $123,510.52.
E) $115,637.37.

Question

Quizplus · Accepted Answer

The correct answer is B because the amount in the account at the end of 20 years is $105,039.84. This can be calculated using the formula for the future value of an annuity, which is:FV = P * ((1 + r)^n - 1) / rwhere:* FV is the future value of the annuity* P is the amount of each payment* r is the annual interest rate* n is the number of paymentsIn this case, P = $750, r = 5.25%, and n = 20 * 4 = 80. Plugging these values into the formula, we get:FV = 750 * ((1 + 0.0525)^80 - 1) / 0.0525= 105,039.84

Assume That You Invest $750 at the End of Each