Question

Tara deposits $1,000 in a retirement savings account at the beginning of each year. The account pays an interest rate of 5% compounded annually, and the interest is paid on the last day of the year. What is the balance in Tara’s account at the end of the fourth year?

A. $4,310.13
B. $4,525.63
C. $5,525.63
D. $5,801.91

Answer 1

See the formula of the future value of annuity due through Google
FVAD=1,000×(((1+0.05)^(4)−1)
÷(0.05))×(1+0.05)=4,525.63

Answer 2

B. $4,525.63

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