Question

In order to have money for their son's college education, a young couple started a savings plan into which they made intermittent deposits. They started the account with a deposit of $3,000 (in year zero) and then added $5,000 in years two, five, six, and added $6,000 in year nine and ten. What is the amount they had in the account in year ten if they earned interest at 15% per year

Answer 1

$59,129.00

Step-by-step explanation:

The formula for the future value is P(1+i)^n

P= 3000, 5000, 6000

i= 15%

n= 2,3,6,9,10

FV= 3000 x 1.15^10 + 5000 x 1.15^8 + 5000 x 1.15^5 + 5000 x 1.15^4 + 6000 x 1.15^ 1 + 6000 x 1.15^0

FV= 3000 X 4.045 + 5000 X 3.059 + 5000 X 2.011 + 5000 x 1.749 + 6000 x 1.15 + 6000 X 0

Fv= 12135 + 15294 + 10055 + 8745 + 6900 + 6000

FV = $59,129.00