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What is the future worth of a series of equal​ year-end deposits of ​$3700 for 11...

What is the future worth of a series of equal​ year-end deposits of ​$3700 for 11 years in a savings account that earns 14​% annual interest if the following were​ true? ​(a) All deposits are made at the end of each​ year? ​(b) All deposits are made at the beginning of each​ year?

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Homework Answers

Answer #1

Solution :- Annual Deposit = $3,700

Life = 11 Years

Interest Rate = 14%

In Case Payment made at the end of each year

Future Value = $3,700 * F/A ( 14% , 11 )

= $3,700 * 23.0445

= $85,264.71

In Case Payment made at the beginning of each Year

Now if we think we find that all the payments are made one year before

Future value at the end of 10 Years = $3,700 * F/A ( 14% , 11 )

= $3,700 * 23.0445

= $85,264.71

Future Value at the end of Year 11 = $85,264.71 * ( 1 + 0.14 ) = $97,201.77

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