A deposit of 5800 made at the end of each for two years and

A deposit of $5,800 made at the end of each for two years and earning 12% interest compounded annually would grow to how much at the end of two years?

options: 1) $11,600.00 2) $ 7,273.20 3) $19,569.20 4) $12,296.00

Solution

Future value of annuity=Annuity[(1+rate)^time period-1]/rate

=$5800[(1.12)^2-1]/0.12

=$5800*2.12

=$12296.00