113k views
5 votes
A company deposits $3500 in a bank at the end of every year for 12 years. The company makes no deposits during the subsequent 8 years. If the bank pays 6% interest, how much would be in the account at the end of 20 years?

1 Answer

5 votes

Answer:

FV= $94,108.42

Step-by-step explanation:

First, we need to calculate the future value of the 12 annual deposits:

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

A= annual deposit

FV= {3,500*[(1.06^12) - 1]} / 0.06

FV= $59,044.79

Now, the future value at the end of the 20 years (8 years more):

FV= PV*(1 + i)^n

FV= 59,044.79*(1.06^8)

FV= $94,108.42

User Mohsen Alikhani
by
8.6k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories