Question

You deposit $200 each year for 10 years into a sinking fund that pays 6% interest compounded annually what is the future value of your fund

Answer 1

FV= $2,636.16

Explanation:

Giving the following information:

Annual deposit (A)= $200

Number of periods (i)= 10 years

Interest rate (i)= 6%

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

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

A= annual deposit

FV= {200*[(1.06^10) - 1]} / 0.06

FV= $2,636.16