Question

You are going to receive $80 at the end of each year for the next 12 years. If you invest each of those amounts at 12%, then what amount of money will you have at the end of the 12th year

Answer 1

FV= $1,930.65

Step-by-step explanation:

Giving the following information:

Cash flow= $80 a year

Number of periods= 12 years

Interest rate= 12% compounded annually

To calculate the future value, we need to use the following formula:

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

A= annual deposit

FV= {80[(1.12^12) - 1]} / 0.12

FV= $1,930.65