Mr. James wants to deposit $3,000 per year in an account for 4 years (James 4 deposits). Mr. James makes his initial deposit at the beginning of the first year. How much will Mr. James have when the four years are complete if his bank is paying 7% annually with no compounding. (Please show work)
Answer = $ 14,100
Note:
Interest in Year 1 = 3000*7%
Interest in Year 2 = 6000*7%
Interest in Year 3 = 9000*7%
Interest in Year 4 = 12000*7%
Beginning Value of Year 2 = Ending Value of Year 1 +3000
Beginning Value of Year 3 = Ending Value of Year 2 +3000
Beginning Value of Year 4 = Ending Value of Year 3 +3000
| Year | Beginning Value | Interest (7%) | Ending Value (Beginning Value + Interest) |
| 1.00 | 3,000.00 | 210.00 | 3,210.00 |
| 2.00 | 6,210.00 | 420.00 | 6,630.00 |
| 3.00 | 9,630.00 | 630.00 | 10,260.00 |
| 4.00 | 13,260.00 | 840.00 | 14,100.00 |
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