Question

Susan made 4 uniform annual deposits of $1800 in a savings account that earned an interest rate of 2% per year. Her last deposit was made 7 years ago. What is the future value of her savings 13 years from now, if she leaves the account untouched?

Answer 1

"$ 2,880" is the right answer.

Explanation:

The given values are:

Annual deposit,

PV = $1,800

Interest rate,

r = 2%

or,

= 0.02

As we know,

⇒
`FV=PV* (1+r)n`

On substituting the values, we get

⇒
`=1,800* (1 + 0.02) 4 + 7 + 13`

⇒
`=1,800* (1.02)24`

⇒
`=1,800* 1.6`

⇒
`= 2,880` ($)