Question

In: Finance

in one year, you will make an initial deposit in the amount of $1,000 in a...

in one year, you will make an initial deposit in the amount of $1,000 in a new savings account. You plan to make additional deposits in the same amount of $1,000 for 19 years after the initial deposit. There will only be these 20 deposits and no withdrawals made to your account. Assume the interest rate you will earn is 5% per year. How much will your account be worth in 20 years?

Solutions

Expert Solution

Future value of Annuity = P*[(1+R)^N -1]/R

Where, P = principal

R = rate of interest

N = number of periods

= 1000 * [(1+5%)^20 -1]/5%

= 1000 * [(1.05)^20 -1]/0.05

= 1000 * [( 2.65329770514 -1)]/0.05

= 1000 * (1.65329770514/0.05)

= 1000 * 33.0659541028

= 33065.9541028

Future value of Annuity = $33065.9541

jeff jeffy answered 3 years ago
Next > < Previous

Related Solutions

In one year, you will make an initial deposit in the amount of$5,000 in a...
In one year, you will make an initial deposit in the amount of $5,000 in a new savings account. You plan to make additional deposits in the same amount of $5,000 for 11 years after the initial deposit. There will only be these 12 deposits and no withdrawals made to your account. Assume the interest rate you will earn is 4% per year. How much will your account be worth in 12 years?
If you make a deposit of the amount below at the end of each year for...
If you make a deposit of the amount below at the end of each year for the number of years at the interest rate specified, how much money will you have in the account at the end of that time?(Do not round intermediate calculations, round answer to two decimal places, i.e. 32.16) Payment:9000 Years:23 Interest Rate:9.2%
Calculate the amount you will receive from the sale of a certificate of initial deposit of...
Calculate the amount you will receive from the sale of a certificate of initial deposit of 9 months, initial amount of 150000 at 5% interest rate, when the corresponding risk and long-term placements yield 10% and 6, 4, and 2 months remain to expire
You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in year...
You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in year 4 in your savings account. You think that you can earn 6% per year. How much will you have in your account in Year 6? Yr0    Yr1     Yr2     Yr3     Yr4     Yr 5   Yr 6         $1,000 $1,200            $2,000              ? Bank X promises to pay you $5,200 per year for 8 years, whereas Bank Y offers to pay you $7,300 per year for 5 years....
You want to make one single deposit today (year 0), so that whenyou retire in...
You want to make one single deposit today (year 0), so that when you retire in 39 years from now, you can make annual withdrawals for the subsequent 21 years. Your first withdrawal will be at time 40 and your last withdrawal will be at time 60. You want your first withdrawal (in year 40) to be $57,000 and then increase this payment by 4% every year after the prior one to compensate for inflation. If your interest rate is...
You deposit $1,000 for 21 months at Quarterly compounding and its future amount is $1,188.69. What...
You deposit $1,000 for 21 months at Quarterly compounding and its future amount is $1,188.69. What (nominal, named, stated, quoted) rate did you receive? round to 5 decimal places, leave in decimal format.
1.) You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in...
1.) You plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in year 4 in your savings account. You think that you can earn 6% per year. How much will you have in your account in Year 6? 2.) Bank X promises to pay you $5,200 per year for 8 years, whereas Bank Y offers to pay you $7,300 per year for 5 years. a) Which of these cash flow streams has the higher present value...
You make a $1,000 deposit to an investment account today. The investment earns 5% p.a compounding...
You make a $1,000 deposit to an investment account today. The investment earns 5% p.a compounding monthly for the first 12 months, then it earns 10%p.a compounding monthly for the next 3 years. At the end of the 4 years the balance in the account is (to the nearest whole dollar; don't use $ sign or commas)
Write a program that will accept user input for an initial deposit and a total amount...
Write a program that will accept user input for an initial deposit and a total amount the user wants to have, and will output the number of years it will take to reach his/her goal. For the basic program, the user will deposit the initial amount in a new account, and then the account will receive interest, compounded MONTHLY, at a rate of 0.5%.
Write a program that will accept user input for an initial deposit and a total amount...
Write a program that will accept user input for an initial deposit and a total amount the user wants to have, and will output the number of years it will take to reach his/her goal. For the basic program, the user will deposit the initial amount in a new account, and then the account will receive interest, compounded MONTHLY, at a rate of 0.5%. Then modify it by allowing the user to set a fixed amount to be deposited into...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT