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

$73,571

Explanation:

To solve this problem we can use the following formula:

P = Po * ((1 + r)^t - 1) / r

Where P is the final value, Po is the investment, r is the rate and t is the time. So, we have that:

P = 2000 * ((1 + 0.06)^20 - 1)/0.06

P = 2000 * 2.207135 / 0.06

P = 73,571

The amount of investment after 20 years is $73,571.