Question

ew Quiz: CH 26 Quiz (ungraded) Score: 0 of 1 pt XS26-11 (similar to) Tait is entering high school and is determined to save money for college. Tait teels he can save $1.500 each year for the next four years from his 6 of 12 Test score: 63.13%, 7.58 of 12 pts part-time job. ir Tait is able to invest at 8%, how much will he have when he starts college? (Click the scon to view Present Value of $1 table)(cick the icon to view Present Value or ordinary Annuity of $t1 table ) (CacK the icon to view Future Value of s1 table) (Click the icon to vnew Future Vatue of orainary Annuity of $1 table Click the icon to see the Worked Solution. (Round your a?swer to the nearest dollar) Tait wil have s 6.759 when he starts college You answered: 2041 Move your pointer c red arrows to see incorrect answers

What is a formula to get the correct answer

Answer 1

Solution:

Annual Investment = $1500

Periods (n) = 4 Years

rate (n) = 8%

Future value = Periodic investment [ {(1+r)^n -1} / r]

= $1500 [{(1+0.08)^4 -1}/ 0.08]

= $1500 [(1.08^4 -1)/0.08]

= $6759.17