Solve the Problem $S = A \left( \frac { ( 1 + r ) ^ { t } + 1 - 1 } { r } \right)$

question 206

Multiple Choice

Solve the problem.
-The formula $S = A \left( \frac { ( 1 + r ) ^ { t } + 1 - 1 } { r } \right)$ models the value of a retirement account, where $A =$ the number of dollars added to the retirement account each year, $\mathrm { r } =$ the annual interest rate, and $\mathrm { S } =$ the value of the retirement account after t years. If the interest rate is $7 \%$ , how much will the account be worth after 15 years if $\$ 800$ is added each year? Round to the nearest whole number.

• A) \(\$ 22,310\)
• B) \(\$ 2347\)
• C) \(\$ 12,800\)
• D) \(\$ 35,316\)

---

Definitions:

Lease Payments

Lease payments are the regular payments made by a lessee to a lessor for the use of an asset, such as property or equipment, under a lease agreement.

Fair Value

A measurement of the price at which an asset could be bought or sold, or a liability settled, in a current transaction between willing participants in the market.

Economic Life

The estimated period over which an asset is expected to be economically usable by one or more users, with profitability considered.

Residual Value

The estimated value that an asset will realize upon the end of its useful life, often used in calculating depreciation.