Question

Marry will start to save in equal annual installments of $4,000 each year in 4 years (she will make her first savings payment 4 years from today). If she continues to save and earns interest of 4.7% and continues to make $4,000 savings contributions each year, how much will she have saved in 9 years from today after making her final contribution

Answer 1

the amount saved is $27,003.07

Step-by-step explanation:

The computation of the amount saved is shown below:

= Annual Payment × [{(1 + rate)^number of years - 1} ÷ rate]

= $4000 × [{(1 + 0.047)^6 - 1} ÷ 0.047]

= $4000 × [0.3173 ÷ 0.047]

= $4000 × 6.7508

= $27,003.07

hence, the amount saved is $27,003.07

We simply applied the above formula

And, the same is to be considered