Question

"florence deposits $4,000 at the end of each year in an account earning 2.35% interest, compounded annually. what is the future value of this annuity after 5 years of investing?"

Answer 1

$20,962.35

Explanation:

To solve for the amount of money the account of Florence will have, we use the formula:

`FV=P[((1+r)^(n)-1)/(r)]`

Our available variables are:

P = 4000

n = 5

r = 2.35% or 0.0235

Now let's plug them into the formula.

`FV=4000[((1+0.0235)^(5)-1)/(0.0235)]`

`FV=4000[((1.0235)^(5)-1)/(0.0235)]`

`FV=4000[5.2405876943550625]`

`FV=20962.35`