Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of the first year. $38,470 $38,578 $34,578 $35,878

The future value of this annuity is $38,578.

Calculation of the future value of this annuity is as follows:

The Future Value of Annuity is

= Annuity × [{(1+rate of interest)^number of years -1} ÷ rate of interest]

= $5,000 × [{(1+0.10)^6 -1} ÷ 0.10]

 = $5,000 × (1.771561 -1) ÷  0.10

= $38,578.05

Therefore we can conclude that the future value of this annuity is $38,578.

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