Question

You are going to deposit $22,500 today. You will earn an annual rate of 4.7 percent for 12 years, and then earn an annual rate of 4.1 percent for 15 years. How much will you have in your account in 27 years

Answer 1

Total FV= $71,335.17

Step-by-step explanation:

Giving the following information:

Initial investment= $22,500

You will earn an annual rate of 4.7 percent for 12 years, and then earn an annual rate of 4.1 percent for 15 years.

To calculate the Future Value, we need to use the following formula:

FV= PV*(1+i)^n

First part:

FV= 22,500*(1.047^12)

FV= $39,042.96

Second part:

FV= 39,042.96*(1.041^15)

FV= $71,335.17

Total FV= $71,335.17