Question

Naomi plans on saving $3,000 a year and expects to earn an annual rate of 10.25 percent. How much will she have in her account at the end of 45 years

Answer 1

D. $2,333,572

To find the future value of annuity ordinary the formula is

Fv=pmt [(1+r)^(n)-1)÷r]

Fv future value?

PMT payment per year 3000

R interest rate 0.1025

N time 45 years

So

Fv=3,000×(((1+0.1025)^(45)−1) ÷(0.1025))=

$2,333,571.66

Good luck!