Question

Carla Medavoy will invest $8,550 a year for 18 years in a fund that will earn 15% annual interest. Click here to view factor tables If the first payment into the fund occurs today, what amount will be in the fund in 18 years? If the first payment occurs at year-end, what amount will be in the fund in 18 years? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 458,581.) First payment today $enter a dollar amount rounded to 0 decimal places First payment at year-end

Answer 1

$8550 Annual Payment = Period = 18 years Interest = 15% p.a. first payment occurs today, future value = Future valu = $8560 x $8550 % Future value annuity due (15% 18) FUADI (15% 18) = $ 8550 x 75.83636 = $648401 - Answell - $ 648401 first payment at year end Future future value = value = $85508 $8500 X Future value annuity favor (15% 18 FUAR (15%.18) = $8550 x 87.21181 = $745661 Answer - $745661