Question

Jorgen made deposits of $250 at the end of each year for 12 years. The rate received was 6% annually. What's the value of the investment after 12 years?

Answer 1

$430

Explanation:

We can use the simple interest rate formula to calculate the investment value after 12 years. The formula is:

`A=P*(1+r*t)`

Where A is the value of the amount after investment, P is the intitial investment, r is the rate and t is the time invested.

Therefore $250 at a rate of 6% for 12 years:

`A=250*(1+0.06*12)=430`

The value of the investment after 12 years is $430

Answer 2

FV = P(
`( (1+r)^(n)-1 )/(r)`)

Where, FV = Value after 12 years, P= Yearly deposits = $250, r= Rate = 6% = 0.06, n=Number of years = 12 years.

Then,
FV= 250 (
`(( 1+0.06)^(12) -1 )/(0.06)`) = $4,217.50