Question

1] Assume you have $2,500 to invest today at 5% interest compounded annually Determine how much you will have accumulated in the account at the end of: a) 5 years b) 10 years 2] Assume instead an annuity of $2,500 (which means you will invest $2,500 per year) which will also be compounded at 5% interest annually. Determine how much you will have accumulated in the account at the end of (future value): (Note this problem is for an annuity and this variable is the "payment".) a) 5 years b) 10 years

Answer 1

1

a

Future value = present value*(1+ rate)^time

Future value = 2500*(1+0.05)^5

Future value = 3190.7

b

Future value = present value*(1+ rate)^time

Future value = 2500*(1+0.05)^10

Future value = 4072.24

Please ask remaining parts seperately