Question

Yao decides to place a $2,000 deposit at the end of each year into a bond fund that earns 6% annually. Find the amount of the investment in 20 years.

Answer 1

$6,414.271

Step-by-step explanation:

Principal ( Initial deposit) = $2,000

Interest rate = 6% annually = 6/100 = 0.06

Period (Time ) = 20 years.

Number of times it earned (n) = annually (yearly)

Formula to be used =

A = P( 1 + r/n)^nt

A = $2,000( 1 + 0.06/1) ^ 1×20

A = $2,000(1.06) ^20

A = $6,414.271

The total amount on investment in 20 years = $6,414.271