document.write( "Question 1194507: At the end of each year for 8 years, a corporation will deposit $12, 500 in a depreciation fund to provide
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Algebra.Com's Answer #848517 by ikleyn(52786) $\"\"$ $\"About$

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\n" ); document.write( "At the end of each year for 8 years, a corporation will deposit $12,500 in a depreciation fund
\n" ); document.write( "to provide for replacement of machinery at the end of 8 years. If the fund accumulates
\n" ); document.write( "at 8% effective, how much is in it just after the:
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\n" ); document.write( "(b) 5th deposit?
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document.write( "It is a classic Ordinary Annuity saving plan. The general formula is \r\n" );
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document.write( "    FV = ,    (1)\r\n" );
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document.write( "where  FV is the future value of the account;  P is the annual payment (deposit); \r\n" );
document.write( "r is the annual percentage rate presented as a decimal; \r\n" );
document.write( "n is the number of deposits (= the number of years, in this case).\r\n" );
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document.write( "(a)  Under given conditions, P = 12500;  r = 0.08;  n = 8.  So, according to the formula (1), \r\n" );
document.write( "Future value at the end of the 8-th year\r\n" );
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document.write( "    FV =  = $132,957.85  (rounded).\r\n" );
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document.write( "It is the ANSWER to question (a).\r\n" );
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document.write( "(b)  This time, P = 12500;  r = 0.08;  n = 5.  So, according to the formula (1), \r\n" );
document.write( "Future value at the end of the 5-th year\r\n" );
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document.write( "    FV =  = $73,332.51  (rounded).\r\n" );
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document.write( "It is the ANSWER to question (b).\r\n" );
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\n" ); document.write( "\n" ); document.write( "On Ordinary Annuity saving plans, see the lessons\r
\n" ); document.write( "\n" ); document.write( " - Ordinary Annuity saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( " - Solved problems on Ordinary Annuity saving plans\r
\n" ); document.write( "\n" ); document.write( "in this site.\r
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\n" ); document.write( "\n" ); document.write( "The lessons contain EVERYTHING you need to know about this subject, in clear and compact form.\r
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\n" ); document.write( "\n" ); document.write( "When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.\r
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