Question

P 3-30 (similar to) Question Help Your grand ather put some money into an account for you on the day you were born. You are now 18 years old and are a c ed to wit a. How much money would be in the account if you left the money there until your 25th birthday? b. What if you left the money until your 65th birthday? c. How much money did your grandfather originally put into the account? ra the money. The account currently has $5 608 in and pays an interest rate of 7%. a. How much money would be in the account if you left the money there until your 25th birthday? The anount that would be in the account if you left the money there until your 25th birthday would be (Round to the nearest dollar.)

Answer 1

a) Amount in the Bank Account If he keeps until 25 Years

Particulars	Amount
Amount at the end of 18th Year	$5608
Future Value Annuity Factor @7% for 7 Years ((1.07)^7)	1.605781
Amount in the Bank Account at the end of 25th Year ($5608*1.605781) (Amount Rounded off too nearest dollar)	$9005

b) Amount in the Bank Account If he keeps until 65 Years

Particulars	Amount
Amount at the end of 18th Year	$5608
Future Value Annuity Factor @7% for 47 Years ((1.07)^47)	25.72891
Amount in the Bank Account at the end of 65th Year ($5608*25.72891) (Amount Rounded off too nearest dollar)	$134,848

c) Amount actually deposited in bank account

Particulars	Amount
Amount at the end of 18th Year	$5608
Future Value Annuity Factor @7% for 18 Years ((1.07)^18)	3.379932
Amount deposited in the Bank Account ($5608/3.379932) (Amount Rounded off too nearest dollar)	$1659