Question

You are hoping to buy a new boat 3 years from now, and you plan to save $5,800 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the 3rd deposit, 3 years from now

Answer 1

FV= $17,701.6

Step-by-step explanation:

Giving the following information:

Annual deposit (A)= $5,800

Interest rate (i)= 5.2%

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

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

A= annual deposit

FV= {5,800*[(1.052^2) - 1]} / 0.052 + 5,800

FV= $17,701.6