You deposit $400 each year in an account for 15 years and then $600 each year...
You deposit $400 each year in an account for 15 years and then $600 each year in an account for the 15 years after that. If you are
earning 8% annual compounding interest in the account how much do you have in 30 years?
A.
$42,131
B.
$ 38,135
C.
$ 48,087
D.
$ 37,298
E.
$ 50,744
Homework Answers
Answer:
$ 50,744
Explanation:
First 15 years:,
Annual deposit = $400
Years = 15
Interest rate = 8%
Amount at the end of year 15 = FV (rate, nper, pmt, pv, type) = FV (8%, 15, -400, 0, 0) = $10860.8456
Now next 15 years:
Beginning Balance from first 15 years = $10860.8456
Annual deposit = $400
Amount at the end of year 30 = FV (8%, 15, -600, -10860.8456, 0) = $50,744
As such option E is correct and other options A, B, C and D are incorrect.
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