Question

For 8 years, $97 is deposited each week into an account that earns 2.1% interest, compounded...

For 8 years, $97 is deposited each week into an account that earns 2.1% interest, compounded weekly (52 times a year). The account currently has $300 in it. How much will be in the account after 8 years? Round your answer to two decimal places if rounding is necessary. There is a $ sign next to the answer box, so do not type a $ sign in your answer

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Answer #1

Value of account after 8 years is calculated using FV function in Excel :

rate = 2.1%/52 (converting annual rate into weekly rate)

nper = 8 * 52 (8 years with 52 deposits each year)

pmt = -97 (Weekly deposit. This is entered with a negative sign as it is a cash outflow)

pv = -300 (Current value of account. This is entered with a negative sign as it is a like a cash outflow today)

FV is calculated to be $44,284.86

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