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Spencer Corporation will invest $20,000 every December 31st for the next six years (2014 – 2019). If Spencer will earn 12% on the investment, what amount will be in the investment fund on December 31, 2019? A. $181,780 B. $92,096 C. $82,228 D. $162,304
Expert Answer
| Year | Opening balance at the beginning of the year | !2% Return on opening balance | Closing balance at the year end |
| (A=$20,000+C of previous year) | (B=A*12%) | (C=A+B) | |
| 31-Dec-14 | $20,000 | $2,400 | $22,400 |
| 31-Dec-15 | $42,400 | $5,088 | $47,488 |
| 31-Dec-16 | $67,488 | $8,099 | $75,587 |
| 31-Dec-17 | $95,587 | $11,470 | $107,057 |
| 31-Dec-18 | $127,057 | $15,247 | $142,304 |
| 31-Dec-19 | $162,304 | $19,476 | $181,780 |
| Ans | Option (A) $181,780 is Correct |
