Question

You are saving for a car that you plan to purchase in five years. You plan to put $3,000 in savings (which earns 10%, compounded annually) at the end of each year until then. How much will you have saved for the car at the end of the five years? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount.)

Answer 1

Answer:

Amount of Savings   = Present Savings x Future Value of Annuity ( 10% , 5 years)                                          =   $3,000 x 6.1051                                          =    $18,315.30 (or) $18,315

Amount of Savings at the end of 5 Years    = $18,315