147k views
0 votes
if you deposit $5,000 at the end of each year for the next 20 years into an account paying 9.6 percent interest, how much money will you have in the account in 20 years?

User Gingerlime
by
7.9k points

1 Answer

4 votes

Answer: 327, 870.

Explanation: To find out how much money you will have in the account in 20 years, we can use the formula for future value of an annuity:

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

where FV is the future value, P is the payment per period, r is the interest rate per period, and n is the number of periods.

In this case, we have P = $5,000 (the annual deposit), r = 9.6% (expressed as a decimal, or 0.096), and n = 20 (the number of years). Plugging these values into the formula, we get:

FV = $5,000 * (((1 + 0.096)^20 - 1) / 0.096)

= $5,000 * (65.574)

= $327,870

Therefore, you will have approximately $327,870 in the account in 20 years.

User Tomos Williams
by
8.2k points