Question

You deposit $100 into a savings plan at the end of each year. The interest rate is 6% compounded annually. Find the value of the annuity after 7 years. Do not round until the final answer. Then, round to the nearest cent

Answer 1

formula for compound interest rate
\[A = P (1+r/n)^{nt}\]
A = final amount
P = initial investment
r = interest rate
n = number of times the interest is compounded per year
t = number of years

for this P = 100, r = 0.06, n = 1, t = 7. solve for A

Answer 2

100 (1+0.06/1)^1 *7 ?

Answer 3

yes

Answer 4

I got the answer 150.3630 but for some reason it's not on the choices ... what should i do >?

Answer 5

Those are the choices
A $2,506.05
B $697.53
C $839.38
D $236.42

Answer 6

o.o... that's some big numbers there.. let me see what i did wrong >.<

Answer 7

the answer is c

Answer 8

Can you tell me how you got it please ?

Answer 9

\[FV = C ((1+r)^t-1)/r\]

Future value of an ordinary annuity
FV = future value
C = current cash = 100
r = rate = 0.06
t = time = 7

Answer 10

Thank you so much for the help I just figured another way to do it , it's a lot of steps but i got the same result thank you so much for the help

Answer 11

o.o how did you do it? *curious*

Answer 12

Year 1 : 100 Dollars
Year 2 : 100 ( 1+0.06) + 100
Year 3 : 318.36 ( 1+0.06) +100
Year 4 : 437.4616 ( 1+0.06)+100
Year 5 : 563.709296 ( 1+0.06)+100
Year 6 : 697.5318538 (1+0.06)+100
Year 7 : 697.5318538 (1+0.06)+100
= 839.383765