Janet plans on saving $3,000 a year and expects to earn 8.5%. How much will Janet have at the end of twenty-five years if she earns what she expects?

A) $219,317.82
B) $230,702.57
C) $236,003.38
D) $244,868.92
E) $256,063.66

Question

Henry Mitchell · Accepted Answer

Final Answer : C, Explanation :  This problem can be solved by using the formula for future value of an annuity, which is FV = PMT x (((1 + r)^n - 1) / r), where PMT is the annual savings, r is the interest rate, and n is the number of years. Plugging in the given values, we get FV = $3,000 x (((1 + 0.085)^25 - 1) / 0.085) = $236,003.38, which is closest to choice C.

Janet plans on saving $3,000 a year and expects to earn 8.5%. How much will Janet have at the end of twenty-five years if she earns what she expects?

A) $219,317.82
B) $230,702.57
C) $236,003.38
D) $244,868.92
E) $256,063.66

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Learning Objectives

Related questions

Janet plans on saving $3,000 a year and expects to earn 8.5%. How much will Janet have at the end of twenty-five years if she earns what she expects?A) $219,317.82B) $230,702.57C) $236,003.38D) $244,868.92E) $256,063.66

Definitions

Learning Objectives

Learning Objectives

Related questions

Janet plans on saving $3,000 a year and expects to earn 8.5%. How much will Janet have at the end of twenty-five years if she earns what she expects?

A) $219,317.82
B) $230,702.57
C) $236,003.38
D) $244,868.92
E) $256,063.66