If 100 is deposited at the end of each year in a savings acc

If $100 is deposited at the end of each year in a savings account that pays 6% interest per year, how much will be in the account at the end of five years? $663.70 $763.70 $563.70 $1020.18

Solution

formula for calculating the future value of an ordinary annuity (where a series of equal payments are made at the end of each of multiple periods) is: C [ ( 1+r)^n -1)/r ]

C = The amount of each annuity payment

r = The interest rate

FV = 100[ ((1 + 0.06)^5 -1)/0.06 ]

= 100*0.5637

=$ 563.71

Option 3