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Wolf & Co. is planning to save some money to buy new equipment. The company is...

Wolf & Co. is planning to save some money to buy new equipment. The company is opening an account today with a deposit of $15,000 and expects to earn 4% interest. After 3 years, it wants to add an additional $50,000 to the account If the account continues to earn 4% interest, how much money will the company have in its account five years from now?

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Answer #1

At time T=0

Investment = $15000

After 3 years

Value of Investment = $15000(1.04)3 = $16872.96

At time T=3

Investment = $50000

Total Investment = $50000+$16872.96 = $66872.96

After remaining 2 years

Value of Investment = $66872.96(1.04)2 = $72329.80

How much money will the company have in its account five years from now = $72329.80

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