Question

Savings plan & amp investments

Answer 1

Remember that

The formula for the future value of an ordinary annuity is equal to:

`FV=P\lbrack((1+ (r)/(n) )^(nt) -1)/( (r)/(n) )\rbrack`

In this problem we have

P=$121

r=4.2%=0.042

n=4

t=14 years

substitute in the formula

`FV=121\lbrack((1+(0.042)/(4))^(4\cdot14)-1)/((0.042)/(4))\rbrack`

therefore

FV=$9,159.97