Question

One can solve for payments (PMT), periods (N), and interest rates (I) for annuities. The easiest way to solve for these variables is with a financial calculator or a spreadsheet.Quantitative Problem 1: You plan to deposit $2,200 per year for 5 years into a money market account with an annual return of 3%. You plan to make your first deposit one year from today.What amount will be in your account at the end of 5 years

Answer 1

FV= $11,680.1

Step-by-step explanation:

Giving the following information:

Annual deposit= $2,200

Number of peridos= 5 years

Interest rate= 3%

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

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

A= annual deposit

FV= {2,200*[(1.03^5) - 1]} / 0.03

FV= $11,680.1

Using a financial calculator:

CMPD:

n= 5

i=3

PMT= 2,200

FV= ? = 11,680.1