Question

Gretchen starts to save at age 20 for an extended vacation around the world that she will take on her 40th birthday. She will contribute $1000 each year to the account, which earns 1.75% annual interest, compounded quarterly. What is the future value of this investment when she takes her trip?

A. $21,075.22
B. $23,884.84
C. $25,721.57
D. $32,066.31

Answer 1

b.23,884.84

Explanation:

Answer 2

we are asked in the problem to compute the future worth given the annual worth of A =1000$, i = 0.0175 and n = 20. In this case, we can use A/F to compute the answer (F). Substituting to the formula attached, F would have to be equal to 23701.611