Question
In: Math
Amy plans to save $4,500, $0, and $5,500 at the end of Years 1 to 3, respectively. What will her investment account be worth at the end of the Year 3 if she earns an annual rate of 4.15 percent annually?
Amy plans to save $4,500, $0, and $5,500 at the end of Years 1 to 3, respectively. What will her investment account be worth at the end of the Year 3 if she earns an annual rate of 4.15 percent annually?
Solutions
Expert Solution
Explanation: In my opinion, you have skipped the amount for year 2, in my opinion it is $500. I am therefore, posting the answer relevant to both scenarios:
Scenario 1: If it is $0 in year
2 Scenario 2: If it is $500 in year 2
Scenario 1: If it is $0 in year 2: Investment at the end of year 3 = $4,500x(1+0.0415)^2 + $5,500x(1+O.0415)^O Investment at the end of year 3 = $10,381.25
Scenario 2: If it is $500 in year 2: Investment at the end of year 3 = $4,500x(1+0.0415)^2 + $500x(1+0.0415)^1+ $5,500x(1+0.0415)^0 Investment at the end of year 3 = $10,881.25
Scenario 1: If it is $0 in year 2:
Answer = $10,381.25
Scenario 2: If it is $500 in year 2
Answer = $10,881.25
Nipun Maity answered 2 years agoRelated Solutions
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