Question

FV = $22,199.72 (1 +0.07)3 + $9,000 (1 +0.07)2 = $37,499.71 Practice question 2.28 Homework – Unanswered Starting at the end of this year, you plan to make annual deposits of $5,000 for the next 8 years followed by a final deposit of $10,000 in year 9. The deposits earn interest of 4.0%. What will the account balance be by the end of 13 years? Round to the nearest cent. Numeric Answer: Unanswered 2 attempts left Submit Deferred Annuities [ Fullscreen

Answer 1

The account balance at the end of 13 years is calculated below:

$Accumulated\, value=\left [5,000\times \left ( \frac{\left ( 1+0.04 \right )^{8}-1}{0.04} \right )\times \left ( 1+0.04 \right )^{5}+10,000\times \left ( 1+0.04 \right )^{4} \right ]$

$Accumulated\, value=\left [5,000\times 9.21423\times 1.21665+10,000\times 1.16986 \right ]$

$Accumulated\, value=\left [56,052.58+11,698.59 \right ]$