Question

You want to go to grad school 3 years from now, and you can save $5,000 per year, beginning immediately. You plan to deposit the funds in a mutual fund which you expect to return 9% per year. Under these conditions, how much will you have just after you make the 3rd deposit, 3 years from now?

Answer 1

Answer to question :

In the given question saving is $5,000 per year beginning immediately

Deposit the fund in the mutual fund

Expected return is 9% p.a.

Particular	Opening Balance	Contribution	Cumulative balance	Interest	Closing Balance
Installment 1	$ 0	$ 5,000	$5,000	$450	$5,450
Installment 2	$5,450	$ 5,000	$10,450	$940.50	$11,390.50
Installment 3	$11,390.50	$5,000	$16,390.50	$1,145.15	$17,865.65

From the above table we can find that after making the 3rd deposit, 3 years from now we have $ 17,865.65