Question

g You plan to deposit $1,700 per year for 5 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. What amount will be in your account at the end of 5 years? Round your answer to the nearest cent. Do not round intermediate calculations. $ Assume that your deposits will begin today. What amount will be in your account after 5 years? Round your answer to the nearest cent. Do not round intermediate calculations.

Answer 1

Instructions are listed below

Step-by-step explanation:

Giving the following information:

You plan to deposit $1,700 per year for 5 years into a money market account with an annual return of 2%

We need to use the final value formula with an annual payment:

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

1) with deposits at the end of the year:

FV= {1700*[(1.02^5)-1]}/0.02= $8846.87

2) with deposits at the beginning of the year:

Because it is at the beginning, there is one more year of interest:

FV= 8846.87 + [1700*(1.02^5)-1700]= $9023.81