Suppose you deposited $5,000 each year into an account earning 6 per cent interest

Finance Dec 11, 2020

Suppose you deposited $5,000 each year into an account earning 6 per cent interest. The first deposit was made one year from today. If you make 10 deposits in all, how much would you have in 10 years' time?

A. $65,903.97

B. $50,000

C. $55,721.50

D. $46,936.46

Expert Solution

Computation of Future Value using FV Function in Excel:

=-fv(rate,nper,pmt,pv)

Here,

FV = Future Value = ?

Rate = 6%

Nper = 10 years

PMT = $5,000

PV = 0

Substituting the values in formula:

=-fv(6%,10,5000,0)

FV or Future Value = $65,903.97

So, the correct option is A "$65,903.97".

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