What amount received at the end of 15 years is equivalent to $100 received at the end of each year for 15 years if the interest rate is 12%?

A) $3,728
B) $4,042
C) $2,676
D) $547
E) $625

Question

What amount received at the end of 15 years is equivalent to $100 received at the end of each year for 15 years if the interest rate is 12%?A) $3,728B) $4,042C) $2,676D) $547E) $625

joana nunes · Accepted Answer

Final Answer : A, Explanation :  The future value of an annuity is given by the formula:FV = PMT * [(1 + r)^n - 1] / rwhere:PMT is the payment amountr is the interest raten is the number of periodsIn this case, PMT = $100, r = 12%, and n = 15. Plugging these values into the formula, we get:FV = $100 * [(1 + 0.12)^15 - 1] / 0.12= $100 * [3.728 - 1] / 0.12= $100 * 2.728 / 0.12= $3,728Therefore, the amount received at the end of 15 years is equivalent to $3,728 received at the end of each year for 15 years if the interest rate is 12%.

What amount received at the end of 15 years is equivalent to $100 received at the end of each year for 15 years if the interest rate is 12%?

A) $3,728
B) $4,042
C) $2,676
D) $547
E) $625

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