Ask Question
10 March, 17:08

Luana loves shopping for clothes, but considering the state of the economy, she has decided to start saving. At the end of each year, she will deposit $570 in her local bank, which pays her 6% annual interest. Luana decides that she will continue to do this for the next four years. Luana savings are an example of an annuity. How much will she save by the end of four years?

+5
Answers (1)
  1. 10 March, 20:00
    0
    Luana will save $2,493.522

    Explanation:

    Given:

    Luana will deposit $570 every year for 4 years. This is an annuity as same amount is deposited every year.

    Rate is 6% or 0.06

    We have to compute Luana's savings at the end of 4th year.

    Refer future value of annuity factor table at 6%, 4th year. Annuity factor is 4.3746.

    Savings = Yearly deposit * Annuity factor

    = 570 * 4.3746

    = $2,493.522

    Therefore, Luana will save $2,493.522 by the end of 4 years.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Luana loves shopping for clothes, but considering the state of the economy, she has decided to start saving. At the end of each year, she ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers