SOLUTION: You deposit $4000 each year into an account earning 4% interest compounded annually. How much will you have in the account in 35 years?

Question 1121873: You deposit $4000 each year into an account earning 4% interest compounded annually. How much will you have in the account in 35 years?
Found 2 solutions by ikleyn, solver91311:
Answer by ikleyn(52781)   (Show Source): You can put this solution on YOUR website!
.
It is Ordinary Annuity saving plan.

See the lesson
    - Ordinary Annuity saving plans and geometric progressions
in this site.

The formula for the future value is FV = = $294,608.90.

Answer by solver91311(24713)   (Show Source): You can put this solution on YOUR website!

Depends.

If you make the first deposit at the END of the first compounding period (Future Value of Annuity, FVA) then the formula is:

Where is the periodic payment, is the interest rate per compounding period expressed as a decimal, and is the number of compounding periods.

On the other hand, if your payment is made at the beginning of the first compounding period (Future Value of Annuity Due, FVAD), then the formula is:

In your case, , , and . It is up to you to do the arithmetic after you decide which formula to use.

John

My calculator said it, I believe it, that settles it

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