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What is the future value of $5,000 set aside each year for 20 years at 10%...

What is the future value of $5,000 set aside each year for 20 years at 10% compounded annually?

What is the total investment income for the period?

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Answer #1

Annual Deposit = $5,000
Annual Interest Rate = 10%
Period of Investment = 20 years

Future Value of Investment = $5,000 * FVIFA(10%, 20)
Future Value of Investment = $5,000 * (1.10^20 - 1) / 0.10
Future Value of Investment = $5,000 * 57.2750
Future Value of Investment = $286,375

Total Deposit = $5,000 * 20
Total Deposit = $100,000

Investment Income = Future Value of Investment - Total Deposits
Investment Income = $286,375 - $100,000
Investment Income = $186,375

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