Homework Answers
Solution :- 10
The Future Value of Annuity deposit for 25 years at 4% = P [ (1 + r )n - 1 ] / r
Where P = 5,000
r = 4%
n = 25 Years
Amount at retirement = $5,000 [ (1 + 0.04 )25 - 1 ] / 0.04
= $125,000 * [ 2.67 - 1 ]
= $208,229.5
The answer is closest to $210,000
Therefore the correct answer is (C)
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