Belle invests $200 at the end of each year in a savings account that pays 5% annually.How much will Belle have at the end of 5 years? Use Table FA-2.
A)$1,000
B)$1,105.20
C)$1,077.50
D)$1,082.37

Question

Belle invests $200 at the end of each year in a savings account that pays 5% annually.How much will Belle have at the end of 5 years? Use Table FA-2. 
A)$1,000 
B)$1,105.20 
C)$1,077.50 
D)$1,082.37

Quizplus · Accepted Answer

Using Table FA-2, we can find the future value of Belle's investment as follows:
Year 1: $200 x 1.05 = $210
Year 2: ($200 + $210) x 1.05 = $441
Year 3: ($200 + $210 + $441) x 1.05 = $693.15
Year 4: ($200 + $210 + $441 + $693.15) x 1.05 = $970.81
Year 5: ($200 + $210 + $441 + $693.15 + $970.81) x 1.05 = $1,105.20
Therefore, Belle will have $1,105.20 at the end of 5 years.

Belle Invests $200 at the End of Each Year in a Savings