Find the Balance of an Increasing Annuity in Which a Principal

question 39

Multiple Choice

Find the balance of an increasing annuity in which a principal of $20 is invested each month for 40 years, compounded monthly at a rate of 8%.

• A)$939.44
• B)$11,878.94
• C)$5,744.14
• D)$70,305.62
• E)$3,703.31

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Definitions:

Future Value

The estimated value of an investment or a financial asset at a specific future date, considering factors like interest rates or returns over time.

Interest Factor

A multiplier used to calculate the amount of interest accrued over a certain period of time.

Calculated

Determined or deduced by mathematical methods.

Annual Return

The percentage gain or loss on an investment over a one-year period, including dividends and capital gains.