SOLUTION: Mike's sport shop deposited $3,400 at the end of each year for 12 years at 7% annual interest. How much will Mike have in the account at the end of the time period?

Question 1138991: Mike's sport shop deposited $3,400 at the end of each year for 12 years at 7% annual interest. How much will Mike have in the account at the end of the time period?
Answer by ikleyn(52803) (Show Source): You can put this solution on YOUR website!
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It is a classic Ordinary Annuity saving plan. The general formula is 


    FV = ,    (1)


where  FV is the future value of the account;  P is your annual payment (deposit); r is the annual percentage rate presented as a decimal; 
n is the number of deposits (= the number of years, in this case).


Under the given conditions, P = 3400;  r = 0.07;  n = 12.  So, according to the formula (1), you get at the end of the 12-th year


    FV =  = $60,820.73.     ANSWER

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On Ordinary Annuity saving plans, see the lessons
- Ordinary Annuity saving plans and geometric progressions
- Solved problems on Ordinary Annuity saving plans
in this site.

The lessons contain EVERYTHING you need to know about this subject, in clear and compact form.

When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.

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