Question

If you deposit $2,300 at the end of each year for each of the next 20 years into your account which pays 9% interest, how much money will you have in 20 years? Show your work.

Answer 1

Annual deposit = $2,300
Number of deposits = 20
Interest rate = 9%

Future value = $2,300*1.09^19 + $2,300*1.09^18 + … + $2,300*1.09 + $2,300
Future value = $2,300 * (1.09^20 - 1) / 0.09
Future value = $2,300 * 51.16012
Future value = $117,668.28

So, you will have $117,668.28 in 20 years.