Question

1. Assume you were born 30 years ago. At that time, your grandparents opened an account for you and deposited $5,000. The account has earned an average of 9%, compounded annually.

1. What is the account balance today?
2. Using the information above, construct (calculate) a timeline of account values for each year 1 – 30. Be sure to use appropriate absolute and relative referencing.
3. Create a line graph depicting how the account balance grew from year to year. Be sure to include appropriate axis labels, legends, axis formats, and chart title.  

Answer 1

a: Final balance = Future value=Present value*(1+Rate)^number of periods

= 5000*1.09^30

= 66338.39

b:

Year	Account balance
0	5000.00
1	5450.00
2	5940.50
3	6475.15
4	7057.91
5	7693.12
6	8385.50
7	9140.20
8	9962.81
9	10859.47
10	11836.82
11	12902.13
12	14063.32
13	15329.02
14	16708.64
15	18212.41
16	19851.53
17	21638.17
18	23585.60
19	25708.31
20	28022.05
21	30544.04
22	33293.00
23	36289.37
24	39555.42
25	43115.40
26	46995.79
27	51225.41
28	55835.70
29	60860.91
30	66338.39

3: Workings and graph