Question

The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make annual deposits of $185,000 into a special bank account at the end of each of 10 years beginning December 31, 2021. Assuming that the bank account pays 7% interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2030

Answer 1

FV= $2,400,927.92

Step-by-step explanation:

Giving the following information:

Annual deposits= $185,000

Number of compounding periods= 9 years

Number of deposits= 10

Interest rate= 7%

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

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

A= annual deposit

FV= {185,000*[(1.07^9) - 1]} / 0.07 + 185,000

FV= $2,400,927.92