Question

Katie makes deposits of $500.00 at the end of each month for 5 years into an account earning 9.5% annually, then lets the money sit in the account for another 8 years after the last deposit. Find Katie'S balance after this 13 year period.

Answer 1

FV of Annuity :
Annuity is series of cash flows that are deposited at regular intervals for specific period of time.

FV of Annuity = CF [ (1+r)^n - 1 ] / r
r - Int rate per Year
n - No. of years

Particulars	Amount
Cash Flow	500
Int Rate	9.500%
Periods	5

FV of Annuity = Cash Flow * [ [(1+r)^n ] - 1 ] /r
=500 * [ [(1+0.095)^5] - 1 ] / 0.095
=500 * [ [(1.095)^5] - 1 ] /0.095
=500 * [ [1.5742] - 1 ] / 0.095
=500 * [0.5742] /0.095
3022.31

Future Value:
FV = PV (1+r)^n
Where n is Int rate per year
n - No. of years

FV = 3022.31 (1+ 0.095)^8
= 3022.31 (1.095)^8

= 3022.31 * 2.0669

= 6246.81

Pls do rate, if the answer is correct and comment, if any further assistance is required.