Question

your employer gives you a stock bonus of $1,000 in your company at the end of each year. you plan to retire in 20 years. the stock has a growth rate of 15 percent per annum. what will the value of your stock be in 20 years? question 1 options: $102,443.58 $86,421.00 $117,810.10 $72,035.10 cannot determine with the information provided.

Answer 1

We can use the formula for future value of an annuity to find the value of the stock bonus after 20 years:

FV = PMT * ((1 + r)^n - 1) / r

where PMT is the annual payment ($1,000), r is the interest rate (15% or 0.15), and n is the number of periods (20 years).

FV = $1,000 * ((1 + 0.15)^20 - 1) / 0.15
FV = $1,000 * (9.136 - 1) / 0.15
FV = $1,000 * 55.573
FV = $55,573

Therefore, the value of the stock bonus in 20 years will be $55,573. Answer: $55,573 (rounded to the nearest dollar).