Question

What will be the balance on September 1, 2024 in a fund which is accumulated by...

What will be the balance on September 1, 2024 in a fund which is accumulated by making $20,000 annual deposits each September 1 beginning in 2017, with the last deposit being made on September 1, 2024? The fund pays interest at 8% compounded annually.

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Answer #1

The balance on September 1, 2024 will be $ 212,732.

Explanation:

Future Value = Annual Deposits * Future Value of an Ordinary Annuity ( n= 8 years, i = 8%)

Calculation of Future Value

Sr No Particulars Amount ($)
a Annual Deposits          20,000
b Future Value of an Ordinary Annuity ( n= 8 years, i = 8%)       10.6366
c Future Value (a*b) 212,732
  • The payments are made at the beginning of each year hence the number of years are 8
  • The future value of an ordinary annuity as per the annuity table for (n = 8 years, i = 8%) is 10.6366
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