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You are considering investing in a retirement fund that requires you to deposit $5,000 per year, and you want to know how much the fund will be worth when you retire. What financial technique should you use to calculate this value?(a) Future value of a single payment (b) Future value of an annuity (c) Present value of an annuity (d) Present value of a perpetuity

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Answer:

The appropriate technique to be applied is future value of annuity. The correct answer is B.

Explanation:

Since the deposit will be made at the end of each year and there is need to determine the worth of the fund on retirement, the appropriate technique to employ is future value of annuity.

Parrain

Based on the fact that you would be depositing an amount every year, the best financial technique to use would be (b) Future value of an annuity.

The amount you pay every year is considered an annuity because it is a constant payment.

To find the value of the fund when you retire therefore, you need to find the future value of that annuity.

In conclusion, option B is correct.

Find out more on annuities at https://brainly.com/question/11691655.

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