Question

In: Finance

I have $62,000 in my investment account. I want to add $2,000 each month into this...

I have $62,000 in my investment account. I want to add $2,000 each month into this account starting today. I am expecting to earn 1%/month. How much will I have in this account in 2 years?

*Please post formulas or calculations done by calculator*

Expert Solution

At today we have $64,000(62,000+2000of first deposit ) in account and we deposing $2000 at each month . here we need to calculate the future value of all these amount by compounding at the rate of 1%.

future value of cash flows are :

future value of todays 64,000 =64,000*(1.01)^20=64,000*1.220=78,000

future value of deposit at begning of:

second month =2000*(1.01)^19=2416

third month=2000*(1.01)^18=2392

fourth month=2000*(1.01)^17=2368

fifth month=2000(1.01)^16=2345

sixth month=2000(1.01)^15=2321

seventh month=2000(1.01)^14=2298

eigth month=2000(1.01)^13=2276

ninth month=2000(1.01)^12=2253

tenth month=2000(1.01)^11=2231

eleventh month=2000(1.01)^10=2209

tewelth month=2000(1.01)^9=2187

thirteenth month=2000(1.01)^8=2165

fourteenth month=2000(1.01)^7=2144

fifteenth month=2000(1.01)^6=2123

sixteenth=2000(1.01)^5=2102

seventeenth=2000(1.01)^4=2081

eighteenth=2000(1.01)^3=2060

ninteenth=2000(1.01)^2=2040

twenteenth=2000*1.01=2020

total future value $=120031

jeff jeffy answered 2 years ago

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