Suppose that you earned a bachelor's degree and now you're teaching high school. The school district offers teachers the opportunity to take a year off to earn a master's degree. To achieve this goal, you deposit \( \$ 2000 \) at the end of each year in an annuity that pays \( 5.5 \% \) compounded annually. a. How much will you have saved at the end of five years? b. Find the interest. i) Click the icon to view some finance formulas.

To find out how much you'll save at the end of five years with an annuity that pays \(5.5\%\) compounded annually, we can use the future value of an annuity formula: \[ FV = P \times \frac{(1 + r)^n - 1}{r} \] In your case: - \(P = 2000\) - \(r = 0.055\) - \(n = 5\) Plugging in the values: \[ FV = 2000 \times \frac{(1 + 0.055)^5 - 1}{0.055} \approx 2000 \times \frac{1.308 - 1}{0.055} \approx 2000 \times 5.584 = 11168 \] So, at the end of five years, you'll have approximately \$11,168 saved. To find the interest earned, simply subtract the total amount you deposited from your future value. You've deposited \(5 \times 2000 = 10000\). Thus, the interest is: \[ Interest = FV - Total Deposits = 11168 - 10000 = 1168 \] So, the total interest earned will be approximately \$1,168. Now, you can celebrate your wise financial planning! 🥳💰