Connie made deposits of $2000 at the beginning of each year for four years. The rate she earned is 5% annually. What is the value of Connie's account in four years?
9051.2
what's the answer on this one?
To calculate the value of Connie's account in four years, we can use the formula for the future value of an ordinary annuity:
FV = P * [(1 + r)^n - 1] / r
Where:
FV = Future Value
P = Annual deposit
r = Interest rate per period
n = Number of periods
In this case, Connie makes deposits of $2000 annually for four years, and the interest rate is 5% per year. Plugging these values into the formula, we get:
FV = 2000 * [(1 + 0.05)^4 - 1] / 0.05
Simplifying the equation:
FV = 2000 * [(1.05)^4 - 1] / 0.05
FV = 2000 * (1.21550625 - 1) / 0.05
FV = 2000 * 0.21550625 / 0.05
FV = 861.025
Therefore, the value of Connie's account in four years will be approximately $861.03.