Question

Aubrey has saved her tax refunds received at the end of her freshman, sophomore, junior, and senior years to pay for a trip to travel to South America in the summer following her college graduation. It is the end of her senior year, her last refund just went into her account, and she is set to leave. She saved the following amounts and earned 4.5% on her savings. Year Freshman $1650 Sophomore 0 Junior 1124 Senior 1890 How much savings does Aubrey have? Round your answer to the nearest whole number and no commas. Answer:

Answer 1

Amount of Savings at the end of Senior year = [CF(i) * (1 + r)^{(n - i)}]

=1

= [$1,650 * (1 + 0.045)^{(4 - 1)}] + [$0 * (1 + 0.045)^{(4 - 2)}] + [$1,124 * (1 + 0.045)^{(4 - 3)}] + [$1,890 * (1 + 0.045)^{(4 - 4)}]

= $1,882.92 + $0 + $1,174.58 + $1,890 = $4,947.50, or $4,948