SOLUTION: A company wants to deposit $500,000 per year in an investment which earns an interest of 10 percent per year compounded annually. Assume the first deposit is made at the end of the

Algebra ->  Finance -> SOLUTION: A company wants to deposit $500,000 per year in an investment which earns an interest of 10 percent per year compounded annually. Assume the first deposit is made at the end of the      Log On


   

Question 1173377: A company wants to deposit $500,000 per year in an investment which earns an interest of 10 percent per year compounded annually. Assume the first deposit is made at the end of the current year and additional deposits at the end of each following year.
(a) To what sum will the investment grow at the time of the 10th deposit?
(b) How much interest will be earned?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
use this financial calculator:
https://arachnoid.com/finance/index.html

your inputs are:

pv = 0
fv = 0
np = 10
pmt = -500,000 (enter without the comma)
ir = 10% (enter without the percent sign)
payment at end of time period

click on fv to get:

fv = 7,968,712.30

pv means present value
fv means future value
pmt means payment in each time period
ir means interest rate percent per time peiod
payments are made at the end of each time period or at the beginning of each time period.
you would select end.

the display or your results are shown below:



the yearly cash flows look like this: