If a business manager deposits $12,000 in a savings account at the end of each year for twenty years, what will be the value of her investment: a. at a compounded rate of 12 percent? b. at a compounded rate of 18 percent? Please show work.
Present value of annuity= payment per period * [1-(1+i)^-n]/i
i = interest rate per period
n = number of periods
a)
Present value = 12000 * [1-(1+12%)^-20]/12%
= 89633.32
b)
Present value = 12000 * [1-(1+18%)^-20]/18%
= 64232.96
If a business manager deposits $12,000 in a savings account at the end of each year...
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