Question

An engineer makes 20 deposits of $ 639 at the end of each year into a bank account that earns 4% annually. How much is in the account at the end of year 23, if she does not make any additional deposits from year 21 to 23, nor does she make any withdrawals?

Answer 1

Given,

A = 639

i = 4%

Future Worth = [A(P/A, i, n)] * (F/P, i, n)

                      = [639(P/A, 4%, 20)] * (F/P, 4%, 23)

                      = [639(13.590)] * (2.465)

                      = 8.684.01 * (2.465)

                      = $21,406.08

Thus, at the end of year 23, the account balance will have $21,406.08.