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What is the future worth of equal yearly deposits of $20,000 for 5 years in a...

What is the future worth of equal yearly deposits of $20,000 for 5 years in a savings account that earns 6% annual compound interest if: a) All deposits are made at the end of each year? b) All deposits are made at the beginning of each year? Draw the cash flow diagram for each case

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Answer #1

when deposits are made at the end of each year-----

A=20000{(1+•06)⁴+(1+•06)³+(1+•06)²+(1+•06)¹+1}

=20000(1•26+1•192+1•125+1•06+1)

20000(5•637)

$112740

Cash flow diagram-----with formula( sorry i can' t type formula ,so giving in written form together with diagram)

when deposits are made in the beginning of each year---

A=20000{(1+•06)^5+(1+•06)⁴+(1•06)³+(1+•06)²+(1+•06)¹}

=20000(1•34+1•26+1•192+1•125+1•06)

=20000(5•977)

=119540 $

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