Question

1.Derek will deposit $3,788.00 per year for 14.00 years into an account that earns 12.00%. Assuming the first deposit is made 6.00 years from today, how much will be in the account 33.00 years from today?

2.Derek will deposit $6,480.00 per year for 11.00 years into an account that earns 8.00%, The first deposit is made next year. He has $12,685.00 in his account today. How much will be in the account 43.00 years from today?

Answer 1

1.

Amount =599,663.34

USING FINANCIAL CALCULATOR

N =14 since the deposits shal be for 14 years

At the end of 19 years

N = 14

I/Y = 12%

PV =0

PMT = 3,788

CPT FV = 122,703

at the end of 33 years = there will be 14 years left

N=14

I/Y =12

PV =122,703

PMT =0

CPT FV =599,663.34

Hence at the end of 33 years 599,663.34 shall be acculmulated

2.

Amount=1,613,140

USING FINANCIAL CALCULATOR

The deposit are to be made for 11 Years

N=11

I/Y=8%

PV = 12,685

PMT =6480

CPT FV = 137,439.6

Now there will be no deposit but the balance shall earn interest for next 32 years

N=32

I/Y=8%

PV =137,439.6

PMT -0

CPT FV =1,613,140