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After receiving an inheritance of $30,000 on her 21st birthday, Julia deposited the inheritance in a...

After receiving an inheritance of $30,000 on her 21st birthday, Julia deposited the inheritance in a savings account with an effective annual interest rate of 6%. She decided to make regular deposits, beginning with $1,000 on her 22nd birthday, and increasing by $250 each year (that is, $1,250 on her 23rd birthday, $1,500 on her 24th birthday, etc.) What is the future worth of Julia’s deposits on her 58th birthday?

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Solution:

Statement of interest and deposit balance at the end o year
Age Opening Balance Investment Interest (Opening Balance*6%) Closing Balance (Opening + Investment + Interest)
21 $0.00 $30,000.00 $0.00 $30,000.00
22 $30,000.00 $1,000.00 $1,800.00 $32,800.00
23 $32,800.00 $1,250.00 $1,968.00 $36,018.00
24 $36,018.00 $1,500.00 $2,161.08 $39,679.08
25 $39,679.08 $1,750.00 $2,380.74 $43,809.82
26 $43,809.82 $2,000.00 $2,628.59 $48,438.41
27 $48,438.41 $2,250.00 $2,906.30 $53,594.72
28 $53,594.72 $2,500.00 $3,215.68 $59,310.40
29 $59,310.40 $2,750.00 $3,558.62 $65,619.03
30 $65,619.03 $3,000.00 $3,937.14 $72,556.17
31 $72,556.17 $3,250.00 $4,353.37 $80,159.54
32 $80,159.54 $3,500.00 $4,809.57 $88,469.11
33 $88,469.11 $3,750.00 $5,308.15 $97,527.26
34 $97,527.26 $4,000.00 $5,851.64 $107,378.89
35 $107,378.89 $4,250.00 $6,442.73 $118,071.63
36 $118,071.63 $4,500.00 $7,084.30 $129,655.92
37 $129,655.92 $4,750.00 $7,779.36 $142,185.28
38 $142,185.28 $5,000.00 $8,531.12 $155,716.40
39 $155,716.40 $5,250.00 $9,342.98 $170,309.38
40 $170,309.38 $5,500.00 $10,218.56 $186,027.94
41 $186,027.94 $5,750.00 $11,161.68 $202,939.62
42 $202,939.62 $6,000.00 $12,176.38 $221,116.00
43 $221,116.00 $6,250.00 $13,266.96 $240,632.96
44 $240,632.96 $6,500.00 $14,437.98 $261,570.93
45 $261,570.93 $6,750.00 $15,694.26 $284,015.19
46 $284,015.19 $7,000.00 $17,040.91 $308,056.10
47 $308,056.10 $7,250.00 $18,483.37 $333,789.47
48 $333,789.47 $7,500.00 $20,027.37 $361,316.83
49 $361,316.83 $7,750.00 $21,679.01 $390,745.84
50 $390,745.84 $8,000.00 $23,444.75 $422,190.59
51 $422,190.59 $8,250.00 $25,331.44 $455,772.03
52 $455,772.03 $8,500.00 $27,346.32 $491,618.35
53 $491,618.35 $8,750.00 $29,497.10 $529,865.45
54 $529,865.45 $9,000.00 $31,791.93 $570,657.38
55 $570,657.38 $9,250.00 $34,239.44 $614,146.82
56 $614,146.82 $9,500.00 $36,848.81 $660,495.63
57 $660,495.63 $9,750.00 $39,629.74 $709,875.37
58 $709,875.37 $10,000.00 $42,592.52 $762,467.89

Therefore future worth of Julia's deposits on her 58th birthday is $762,467.89.

jeff jeffy answered 2 years ago
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