Question

what is the future worth of $811 in year 1 and amounts increasing by $96 per year through year 5 at an interest rate of 10% per year?

Answer 1

Hey Here is the answer feel free to ask anything-

ANS-

Year             Amount                                         Future Value of $1@10%      Future Value

1                    $811                                                               1.4641                         $1187.3851

2                 $811+ ($96*1) = $907                                     1.331                          $1207.217

3                 $811+ ($96*2) = $1003                                    1.21                           $1213.63

4                 $811+ ($96*3) = $1099                                     1.1                            $1208.9

5                 $811+ ($96*4) = $1195                                     1                               $1195

                                                                            Future worth                               $6012.1321

It is assumed that the amounts are at the end of the respective years and future worth at the end of 5 years is calculated.

The amount at last would not get any interest as it is at the end of 5^th year and at same time we are computing future worth.