Question

You want to go to grad school 3 years from now, and you can save $5,000 per year, beginning one year from today. You plan to deposit the funds in a mutual fund which you expect to return 9% per year. Under these conditions, how much will you have just after you make the 3rd deposit, 3 years from now

Answer 1

$16,390.50

Step-by-step explanation:

For computing the amount after you make the 3rd deposit we need to use the future value formula i.e to be shown in the attachment

Provided that,

Present value = $0

Rate of interest = 9%

NPER = 3 years

PMT = $5,000

The formula is shown below:

= -FV(Rate;NPER;PMT;PV;type)

So, after applying the above formula, the future value is $16,390.50