Compute the future value at the end of year five (5) of a $2,000 deposit at the end of year one (1) and another $2,000 deposit at the end of year two (2) using a seven (7) percent interest rate per year.

Group of answer choices

A. $5,071.68

B. $2,805.10

C. $5,426.70

D. $4,739.89

E. $2,621.59

Solutions

Expert Solution

Future Value = Present value * (1 + interest rate)^{no of periods}

Future Value = $2000 * (1 + 7%)⁴ + $2000 * (1 + 7%)³

Future Value = $5071.68

jeff jeffy answered 2 years ago

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