Question

Derek will deposit $4,188.00 per year for 13.00 years into an account that earns 14.00%. Assuming the first deposit is made 5.00 years from today, how much will be in the account 33.00 years from today?

Suppose you deposit $2,174.00 into an account today that earns 11.00%. In 15.00 years the account will be worth $________.

please show work.

Answer 1

Present Value of Deposit = $ 4188*1/(1.14)^5+$ 4188*1/(1.14)^6+$ 4188*1/(1.14)^7+$ 4188*1/(1.14)^8+......+$ 4188*1/(1.14)^17

= $ 14,486.91

Future Value = Present Value * ( 1+ Rate of Interest)^ Time

= $ 14,486.91*(1+14%)^33

= $ 1093542.98

Answer: $ 1,093,542.98

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Future Value = Present Value * ( 1+ Rate of Interest) ^Time

= $ 2174* (1+11%)^15

= $ 10401.6975

= $ 10401.70

Answer = $ 10401.70