Question6 On January 1, 2017, Sunland Company decided to begin accumulating a fu

Question

Question6 On January 1, 2017, Sunland Company decided to begin accumulating a fund for asset replacement five years later. The company plans to make five annual deposits of $57000 at 10% each January 1 beginning in 2017, what will be the balance in the fund, on January 1, 2022 (one year after the last deposit)? The following 10% interest factors may be used. Present Value of Ordinary Annuity Future Value of 4 periods 5 periods 6 periods 3.1699 3.7908 4.3553 Ordinary Annuity 4.6410 6.1051 7.7156 O $285000 $347991 $313500 $382790 Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT

Explanation / Answer

1. Computation of Future Value of Annuity Option D

Future Value of Annual deposits = Annual Deposit * (Future Value annuity 7 periods - 1)

Future Value of Annual deposits = $57000 * (7.7156 - 1)

Future Value of Annual deposits = $382790

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