In: Finance
Alysha plans to invest $4000 in an equity fund every year end
beginning this year. The expected annual return on the fund is 15
percent. How much would she expect to have at the end of 16
years?
A. $222870
B. $194322
C. $190322
D. $260300
Future value of an ordinary annuity = P{[(1 + r)^n - 1] / r}
Future value of an ordinary annuity = $4,000{[(1 + 0.15)^16 - 1] / 0.15}
Future value of an ordinary annuity = $222,870