Question

BobCat Inc. will deposit $20,000 in an 8% fund at the end of each year for 8 years beginning December 31, Year 1. What amount will be in the fund immediately after the last deposit?

Answer 1

FV= $198,456.07

Step-by-step explanation:

Giving the following information:

Annual deposit= $20,000

Interest rate= 8%

Number of periods= 8 years

To calculate the future value after the last deposit, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {20,000*[(1.08^7) - 1]} / 0.08 + 20,000

FV= 178,456.07 + 20,000

FV= $198,456.07