8) The Masterson family is setting up a vacation fund, and they plan on depositing $1700...
8) The Masterson family is setting up a vacation fund, and they plan on depositing $1700 per quarter in an investment that will pay 12% annual interest. What amount will they have available for their vacation at the end of 2 years? (Use appropriate factor(s) from the tables provided.)
A) $15,232.00 B) $14,008.00
C) $13,600.00 D) $14,428.24
E) $15,116.91
Homework Answers
FV Ordinary Annuity = C×[(1+i)n−1] / i
where:
C=cash flow per period
i=interest rate
n=number of payments
Therefore FV = $1700 x [ (1+0.03)8 - 1 ] / 0.03
= $15116.97
Answer is E) $15116.91
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