Question

Suppose you have $13,500 sitting in an account earning 10%. What

will it be worth if you can also figure out a way to deposit $1,000
each year for the next 10 years as well.

Answer 1

To calculate the future value of money with deposits, use the formula for compound interest and make yearly calculations for each deposit. After 10 years, the total amount will be the future value.

Step-by-step explanation:

To calculate the future value of the money, we can use the formula for compound interest: A = P(1+r)^n, where A is the future value, P is the principal amount, r is the annual interest rate as a decimal, and n is the number of years. In this case, we have an initial amount of $13,500 and we will be making annual deposits of $1,000 for 10 years. Each year, the principal amount will increase by $1,000, and the interest will be earned on the new total.

So, the future value can be calculated as follows:

1. Year 1: $13,500 + ($13,500 + $1,000) * 0.10 = $15,850
2. Year 2: $15,850 + ($15,850 + $1,000) * 0.10 = $18,435
3. Year 3: $18,435 + ($18,435 + $1,000) * 0.10 = $21,278.50
4. Repeat this process for the remaining years until Year 10.

After 10 years, the total amount will be the future value.