If a person deposited $50 a month for 6 years earning 8%, this would involve what type of computation?
A. Present value of a series of deposits
B. Future value of a single amount
C. Future value of a series of deposits
D. Present value of a single amount
I believe it's C
I chose C also.
You are correct. The computation involved in this scenario is C. Future value of a series of deposits.
To figure out the type of computation involved, we need to understand the options provided:
A. Present value of a series of deposits: This computation is used to determine the current value of a series of future deposits.
B. Future value of a single amount: This computation is used to calculate the value of a single amount in the future, given a specific interest rate and time period.
C. Future value of a series of deposits: This computation is used to determine the total value of a series of future deposits, taking into account the interest earned over time.
D. Present value of a single amount: This computation is used to calculate the current value of a single amount in the future, considering the interest rate and time.
Now, let's analyze the given scenario: a person deposits $50 per month for 6 years, earning 8% interest. Since this involves a series of deposits (each $50 per month) and earning interest over time, the correct answer is C. Future value of a series of deposits.