Exercise B-5 Future value of an amount LO P2 Mark Welsch deposits $6,800 in an a
ID: 2474183 • Letter: E
Question
Exercise B-5 Future value of an amount LO P2
Mark Welsch deposits $6,800 in an account that earns interest at an annual rate of 4%, compounded quarterly. The $6,800 plus earned interest must remain in the account 4 years before it can be withdrawn. How much money will be in the account at the end of 4 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round FV factor to 4 decimal places.)
Present Value
x
f (FV of a Single Amount)
=
Total Accumulation
$ 6,800
x
=
Present Value
x
f (FV of a Single Amount)
=
Total Accumulation
$ 6,800
x
=
Explanation / Answer
Present Value X FV of Single amount = Total accumulation
$6,800 X 1.04^4 =7,955.04
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