Question

Your grandfather has agreed to deposit a certain amount of money each year into an account paying 7.25 percent annually to help you go to graduate school. Starting next year, and for the following four years, he plans to deposit $2,250, $8,150, $7,675, $6,125, and $12,345 into the account. How much will you have at the end of the five years?

Answer 1

$40773.49

Step-by-step explanation:

Number of Years = 5

Interest Rate = 7.25%

Year 1 2 3 4 5

Deposit Amount 2250 8150 7675 6125 12345

FV factors @ 10% 1.32 1.23 1.15 1.07 1.00

FV of deposit 2976.95 10054.25 8828.23 6569.06 12345.00

Total Amount at the end of 5 years = 2976.95 + 10054.25 + 8828.23 + 6569.06 + 12345

Total Amount at the end of 5 years = $40773.49