given a 4 percent interest rate, compute the year 6 future value of deposits made in...

Question

Question

given a 4 percent interest rate, compute the year 6 future value of deposits made in years 1,2,3, and 4 of $1300,$1500,$1500 and $1800 respectively

Answer 1

Answer #1

Year 6 future value of deposits is $ 6,970.61

Working:

Calculation of year 6 value of cash flows:

Year	Beginning cash flow	Interest	Addition in cash flow	Ending cash flow
	a	b=a*4%	c	d=a+b+c
1	0	0	$ 1,300.00	$ 1,300.00
2	$ 1,300.00	$ 52.00	$ 1,500.00	$ 2,852.00
3	$ 2,852.00	$ 114.08	$ 1,500.00	$ 4,466.08
4	$ 4,466.08	$ 178.64	$ 1,800.00	$ 6,444.72
5	$ 6,444.72	$ 257.79	0	$ 6,702.51
6	$ 6,702.51	$ 268.10	0	$ 6,970.61

Answer 2

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