Question

Suzanne invests $20,000 in an account that pays 7% annual compound interest for 3 years. She wants to know how much money she will have at the end of each year. Please draw a timeline and show how much money Suzanne will have accumulated at the end of each calendar year (Years 1-3)

Answer 1

The amount that would be available at the end of each
year is tabulated below:
Year End	Amount in the account at Year end	Calculation
1	$          21,400	[20000*1.07]
2	$          22,898	[21400*1.07]
3	$          24,501	[22898*1.07]

The above can be depicted on a time line as below:

               0 1 2 3

                |………………|……………..|……………….|

        $20000 $21400 $22898 $24501