Lee needs to save a total of $10,000 in order to get started in her cupcake...

Lee needs to save a total of $10,000 in order to get started in her cupcake café venture. She is presently depositing $1,800 a year in a regular savings account earnings 2% interest. How much will she have accumulated five years from now in this regular savings account, assuming she will be leaving her Emergency Fund savings account balance untouched and for a rainy day?

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Expert Solution

Lee needs to save $10,000 to start her business venture

She is depositing $1800 each for 5 years in an account that earns interest rate of 2%.

Calculating the Future value at the end of year 5:-

Where, C= Periodic Payments = $1800

r = Periodic Interest rate = 2%

n= no of periods = 5

Future Value = $9367.27

So, the amount she have accumulated five years from now in this regular savings account is $9367.27

jeff jeffy answered 2 years ago

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