3. Betty and Bob invest $1,000 at the end of each year for 10 years into...

Question

Question

3. Betty and Bob invest $1,000 at the end of each year for 10 years into their retirement account. Interest rates are 4% Effe

Answer 1

Answer #1

Annual Deposit (A) = $1,000

Annual interest rate(i) = 4%

Years(n) = 10

Terminal account balance = F

$F3D A* (F/A, і, п)$

$(1i-1 F A$

putting the values:

$(1+0.04) 1 F 1,000 0.04$

$1.48024428491834- F = 1,000 0.04$

$0.48024428491834 F = 1,000 0.04$

$F 1,000 12.0061071229586$

$F 12006.1071229586$

$F $12,006.11$

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

Answer 2

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