Question

Bob deposits the amount of $105 in his bank account today, and plans to deposit the...

Bob deposits the amount of $105 in his bank account today, and plans to deposit the amount of $175 in the same account one year from today, and finally plans to deposit the amount of $225 in the same account two years from now. If the interest rate is 6.95%, how much will Bob have accumulated in his account three years from today?

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Answer #1

Bob Deposits $ 105 now , Interest rate = 6.95% or 0.0695
FV after 3 years for T=3= PV * (1+ interest rate)3 = 105 * ( 1+ 0.0695)3 = $128.45
Bob Deposits $ 175 after 1 year
FV after 2 years for T=3 = PV * (1+ interest rate)2 = 175 * ( 1+ 0.0695)2 = $ 200.17
Bob Deposits $ 225 after 2 year
FV after 1 years for T=3= PV * (1+ interest rate)1 = 225* ( 1+ 0.0695)1 = $ 240.64

Total Amount accumulated after 3 years (T=3) = 128.45 + 200.17 + 200.64 = $569.26
Best of Luck God Bless

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