Suppose that you deposit $1,467 in a savings account at FirstFederal Savings of Stanton at...

Suppose that you deposit $1,467 in a savings account at First Federal Savings of Stanton at the startof each of year for the next 7 years, which is your holding period. You plan to leave these contributions and any interest in the account until the end of your holding period. You forecast an annual interest rate of 6.59%, compounded annually.

What is the forecast value of your account at the end of your holding period?

Round your answer to the nearest dollar.

Solutions

Expert Solution

Periodic yearly Investment in Savings account for at the start of each year for next 7 years is $1467

Calculating the Future Value of yearly Investment at the end of planned holding period using the Future value of Annuity Due Formula:

Where, C= Periodic Investments = $1467

r = Periodic Interest rate = 6.59%

n= no of periods = 7

Future Value = $13,363.67

So, the forecast value of your account at the end of your holding period is $13,364

jeff jeffy answered 2 years ago

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