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Your grandmother has been putting $3000 into a savings account on every birthday since your first...

Your grandmother has been putting $3000 into a savings account on every birthday since your first (that is, when you turned 1). The account pays an interest rate of 3% per year. How much money will be in the account on your 18th birthday immediately after your grandmother makes the deposit on that birthday?

(Please write numbers only, no "$", no ",", round to the dollar, no decimal.  i.e. write  $1,234.56 as 1235)

Solutions

Expert Solution

Future value = Annuity * [(1 + r)^n - 1] / r

Future value = 3000 * [(1 + 0.03)^18 - 1] / 0.03

Future value = 3000 * [1.702433 - 1] / 0.03

Future value = 3000 * 23.414435

Future value = $70,243

The account will have $70,243

jeff jeffy answered 2 years ago
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