Question

A company deposits $2,378 in a bank at the end of every year for 10 years. The company makes no deposits during the subsequent 5 years. If the bank pays 10% interest, how much would be in the account at the end of 15 years?

Answer 1

Final Value= $61,037.04

Step-by-step explanation:

Giving the following information:

Investment= $2,378 in a bank at the end of every year for 10 years.

The company makes no deposits during the subsequent 5 years.

Interest rate= 10%

First, we need to calculate the first 10 years.

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {2,378*[(1.1^10)-1]} / 0.1

FV= $37,899.20

Now, the 5 years:

FV= PV*(1+i)^n

FV= 37,899.2*(1.1^5)

FV= $61,037.04