As part of his retirement planning, Mr. Martin purchases an annuity that pays 5.5% compounded annually. If the yearly payment is $7,500, how much will Mr. Martin have saved in 5 years?
A. $41,908.68

B. $41,858.18

C. $41,958.30

D. $41,837.93

Question

As part of his retirement planning, Mr. Martin purchases an annuity that pays 5.5% compounded annually. If the yearly payment is $7,500, how much will Mr. Martin have saved in 5 years? 
 A. $41,908.68  
 
 B. $41,858.18  
 
 C. $41,958.30  
 
 D. $41,837.93

anonymous · Answer

use formula for annuity immediate or do on a financial calculator. if you use formula for future value of an annuity immediate you have: 7,500((1.055)^5)-1)/.055)=41,858.18

anonymous · Answer

thank you