You deposit $4000 each year into an account earning 7% interest compounded annually. How much will...

Question

Question

You deposit $4000 each year into an account earning 7% interest compounded annually. How much will you have in the account in 35 years?

Answer 1

Answer #1

Future Value of an Ordinary Annuity
= C*[(1+i)^n-1]/i

Where,
C= Cash Flow per period
i = interest rate per period
n=number of period

= $4000[ (1+0.07)^35 -1] /0.07

= $4000[ (1.07)^35 -1] /0.07

= $4000[ (10.6766 -1] /0.07]

= $5,52,947.51

Answer 2

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