Question

Dave makes 3 deposits of $9000 to his saving account over 8 years.
The first deposit happens at Year 0, the second in 3 years, and the
final deposit 1 year after that. For the first 3 years the
effective yearly rate is 6%. For the 1 year after that, the rate is
11%. For remaining years, the rate is only 9%. How much is at the
end if the 8 years?

Can you please use excel and show formulas.

Answer #1

**Using Excel**

First Deposit at EOY 0 | 9000 |

Second Deposit at EOY 3 | 9000 |

Third Deposit at EOY 4 | 9000 |

interest rate for 3 yr | 6% |

interest rate for 4th yr | 11% |

interest rate from 5th to 8th yr | 9% |

Value of deposit at EOY 3 | 19,719.14 |

Value of deposit at EOY 4 | 30,888.25 |

Value of deposit at EOY 8 |
43,601.29 |

**Showing formula in excel**

First Deposit at EOY 0 | 9000 |

Second Deposit at EOY 3 | 9000 |

Third Deposit at EOY 4 | 9000 |

interest rate for 3 yr | 0.06 |

interest rate for 4th yr | 0.11 |

interest rate from 5th to 8th yr | 0.09 |

Value of deposit at EOY 3 | =FV(C5,3,,-C2)+C3 |

Value of deposit at EOY 4 | =FV(C6,1,,-C8)+C4 |

Value of deposit at EOY 8 |
=FV(C7,4,,-C9) |

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