Question

Javier is currently paying ​$1 comma 200 in interest on his credit cards annually.​ If, instead of paying​ interest, he saved this amount every​ year, how much would he accumulate in a​ tax-deferred account earning 9 percent over 9​, 14​, or 19 ​years?

Answer 1

after 9 years:

FV $15,625.2437

in 14 years:

FV $31,223.0270

last, at the nineteenth year:

FV $55,222.1501

Step-by-step explanation:

We have to solve for the annuity of 1,200 dollar with a yield of 9% at the proposed times:

`C * ((1+r)^(time)-1 )/(rate) = FV\\`

C 1,200.00

time 9

rate 0.09

`1200 * ((1+0.09)^(9) -1)/(0.09) = FV\\`

FV $15,625.2437

time = 14

`1200 * ((1+0.09)^(14)-1 )/(0.09) = FV\\`

FV $31,223.0270

time = 19

`1200 * ((1+0.09)^(19) -1)/(0.09) = FV\\`

FV $55,222.1501