If $30,000 is deposited in a savings account at the end of each year and the...

If $30,000 is deposited in a savings account at the end of each year and the account pays interest of 5% compounded annually, what will be the balance of the account at the end of 10 years?

Expert Solution

FV of annuity	=	P * [ (1+r)^n -1 ]/ r

Periodic payment	P=	$ 30,000.00

rate of interest per period	r=
Rate of interest per year		5.0000%

Payment frequency		Once in 12 months
Number of payments in a year		1.00
rate of interest per period		0.05*12/12	5.0000%

Number of periods
Number of years		10
Number of payments in a year		1
Total number of periods	n=	10

FV of annuity	=	30000* [ (1+0.05)^10 -1]/0.05

FV of annuity	=	377,336.78

Balance after 10 years is $377,336.78

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ekkarill92 answered 1 year ago

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