Twenty years ago, you deposited $1,000 into an account. Fifteen years ago, you added an additional...

Twenty years ago, you deposited $1,000 into an account. Fifteen years ago, you added an additional $3,000 to your account. You earned 6 percent, compounded annually, for the first 5 years and 10 percent, compounded annually, for the last 15 years. How much money do you have in your account

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Expert Solution

Amount in Account = Sum of Future value

Future value = Depsoit * FVF(r%, n)

Future Value Factor:
FVF(r%, n) = ( 1 + r )^n
r = Int Rate per period/ Year
n = Balance Periods/ years

Particulars	Cash Flow	FVF	FV of CFs
Deposit 1	$ 1,000.00	5.5901	$ 5,590.10
Deposit 2	$ 3,000.00	4.1772	$ 12,531.74
FV of CFs			$ 18,121.84

FVF of Deposit 1 = (1.05^5)(1.10^15)

Fv of deposit 2 = 1.10^15

Amount in Account today is $ 18121.84

jeff jeffy answered 1 year ago

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