Interest and You Today you deposit $1,000 in an account earning 5%. Every year for the...

Question

Question

Answer 1

Answer #1

Future Value = Periodic payment [ ( 1 + Rate ) ^{No
of periods} - 1) / rate ]

Question - 1

Answer : D = $ 66,438.

Periodic payment = $ 1000.

Rate = 0.05

No of periods = 30.

Future value = $ 1000 [ ( 1 + 0.05 ) ³⁰ - 1 ) / 0.05 ].

Future Value = $ 66,438.

________________________________________________________________________________________

Question - 2

Answer : D = $ 120,800

Periodic payment = $ 1000.

Rate = 0.05

No of periods = 40.

Future value = $ 1000 [ ( 1 + 0.05 ) ⁴⁰ - 1 ) / 0.05 ].

Future Value = $ 120,800

_______________________________________________________________________________________________

Answer 2

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