SOLUTION: Find the amount accumulated FV in the given annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent
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Question 1205192: Find the amount accumulated FV in the given annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.)
$200 is deposited monthly for 10 years at 3% per year in an account containing $7,000 at the start
FV = $ Answer by ikleyn(52788) (Show Source):
You can put this solution on YOUR website! .
Find the amount accumulated FV in the given annuity account.
(Assume end-of-period deposits and compounding at the same intervals as deposits.
Round your answer to the nearest cent.)
$200 is deposited monthly for 10 years at 3% per year in an account containing $7,000 at the start
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It works as if you have two separate accounts:
(a) one account is the principal $7000 deposited once for 10 years at 3% per year compounded monthly;
(b) and the other, which is an Ordinary Annuity plan with $200 deposits at the end of each month
at 3% per year compounded monthly.
For the first account, the future value after 10 years is
FV1 = = 9445.47 dollars (rounded).
For the second account, the future value after 10 years is
FV2 = = 27948.28 dollars (rounded).
Now, the future value of the original account in 10 years is the sum of these two amounts
FV = FV1 + FV2 = 9445.47 + 27948.28 = 37393.76 dollars.
ANSWER. Future value in 10 years is 37393.76 dollars.
