Final answer:
The future value of an annual Tk 5,000 deposit over 6 years at a 7.5 percent annual nominal rate, compounding annually, is closest to Tk 38,937.
Step-by-step explanation:
When calculating the future value of an annuity, where a fixed sum of money is deposited every year, the formula for the future value of an ordinary annuity can be used. For a Tk 5,000 deposit made at the end of each year, at an annual nominal rate of 7.5%, compounded annually over 6 years, the formula is:
FV = P × 【((1 + r)^n - 1) / r】
Where:
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- FV is the future value of the annuity.
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- P is the annual deposit (Tk 5,000).
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- r is the annual interest rate (7.5% or 0.075).
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- n is the number of years the money is deposited (6).
Calculating it provides:
FV = 5,000 × 【((1 + 0.075)^6 - 1) / 0.075】
Working through the calculation gives us the future value, which by using financial calculators or software, is found to be closest to the answer choice
A. Tk 38,937