Question 1163405
.
<pre>
It is a classic Ordinary Annuity saving plan. The general formula is 


    FV = {{{P*(((1+r)^n-1)/r)}}},    (1)


where  FV is the future value of the account;  P is the 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 = 5000;  r = 0.02;  n = 25.  So, according to the formula (1), you get at the end of the 25-th year


    FV = {{{5000*(((1+0.02)^25-1)/0.02)}}} = $160,151.50.


Note that you deposit only  25*$5000 = $125,000.  The rest is what the account earns/accumulates in 25 years.
</pre>

-----------------


On Ordinary Annuity saving plans, &nbsp;see the lessons

&nbsp;&nbsp;&nbsp;&nbsp;- <A HREF=http://www.algebra.com/algebra/homework/Sequences-and-series/Ordinary-Annuity-saving-plans-and-geometric-progressions.lesson>Ordinary Annuity saving plans and geometric progressions</A>

&nbsp;&nbsp;&nbsp;&nbsp;- <A HREF=https://www.algebra.com/algebra/homework/Sequences-and-series/Solved-problem-on-Ordinary-Annuity-saving-plans.lesson>Solved problems on Ordinary Annuity saving plans</A>

in this site.


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


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