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Dewey plans on depositing $1200 every year into a bank account that earns a 4% APR...

Dewey plans on depositing $1200 every year into a bank account that earns a 4% APR until he's 65, he is currently 25. What would be the total amount of money he deposited, balance at age 65 using the TVM solver, and how much interest would he have earned?

N=

I%=

PV=

PMT=

FV=

P/Y=

C/Y=

PMT: End   

Balance:_______

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Answer #1

The formula to be used here is given below:

((1+i) - 1 Future value = Cash flow x

Future value = 1,200 x ((1+0.04)40 - 1 0.04

Future value = 1,200 x 3.801020628 0.04

Future value = 1.200 x 95.0255157

Future value = 114, 030.62

Total amount deposited is $1,200*40 = $48,000.

Total interest earned is $114,030.62 - $48,000 = $66,030.62.

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