Question

you open a bank account, making a deposit of $500 now and deposits of $1,000 every other year. what is the total balance at the end of 10 years from now if your deposits earn 4% interest compounded annually

Answer 1

9880

Step-by-step explanation:

Answer 2

future value = $6625.34

Step-by-step explanation:

given data

deposit now = $500

deposit every other year = $1000

rate = 4 %

time = 10 year

solution

we know here that you $1,000 deposits skipping one year

we get here future value that is express as

future value = deposit ×
`(1+r)^(t)` .......................1

put here value

future value = 500 ×
`(1+0.04)^(10)` + 1000 ×
`(1+0.04)^(8)` + 1000 ×
`(1+0.04)^(6)` + 1000 ×
`(1+0.04)^(4)` + 1000 ×
`(1+0.04)^(2)` + 1000

solve it we get

future value = $6625.34