Question

You make the following five end-of-year deposits into your investment account that earns 9% annual interest: $600 in year 1, $700 in year 2, $500 in year 3, $300 in year 4, and $400 in year 5. Note that the first cash flow of $600 which occurs at the end of year 1 earns interest for four years.What is the balance in your investment account at the end of year 5? Round to the nearest dollar amount.

Answer 1

Year	Deposit	Formula	Future value
1	600	=600*(1+9%)^(5-1)	847
2	700	=700*(1+9%)^(4-1)	907
3	500	=500*(1+9%)^(3-1)	594
4	300	=300*(1+9%)^(2-1)	327
5	400	=400*(1+9%)^(1-1)	400
Total			3,075
Total Investment at the end of year 5=$3,075