Question

You are trying to save money, so you decide to stick $5 a day under your pillow. At the end of the year, you deposit the lump sum. How much will you have after 20 years if the assumed rate is 5%?

Answer 1

deposit end of each year = number of days in a year*amount stuck under pillow each day

=365*5=1825

amount in 20 years

FVOrdinary Annuity = C*(((1 + i )^n -1)/i)

C = Cash flow per period

i = interest rate

n = number of payments

FV= 1825*(((1+ 5/100)^20-1)/(5/100))

FV = 60345.37