Question

To fund your dream vacation, you plan to save $1,475 per year for the next 15 years starting one year from now. If you can earn an interest rate of 6.25%, how much will you have saved for your vacation?

Answer 1

FV= $34,993.05

Step-by-step explanation:

Giving the following information:

Annual deposit= $1,475

Number of periods= 15 years

Interest rate= 6.25%

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

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

A= annual deposit

FV= {1,475*[(1.0625^15) - 1]} / 0.0625

FV= $34,993.05