Question

If you deposit $4,800 at the end of each of the next 20 years into an account paying 10.8 percent interest, how much money will you have in the account in 20 years? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

Future value

$

How much will you have if you make deposits for 40 years?(Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

Future value

$

Answer 1

- Periodic annual deposit in account at the end of each year = $4800

a). Calculating the Future Value in account at the end of 20 years:-

Where, C= Periodic Deposits = $4800

r = Periodic Interest rate = 10.8%

n= no of periods = 20

Future Value = $301,186.56

a). Calculating the Future Value in account at the end of 40 years:-

Where, C= Periodic Deposits = $4800

r = Periodic Interest rate = 10.8%

n= no of periods = 40

Future Value = $2,643,423.31