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22 August, 10:34

How much money will you have in a savings account that earns 16% annually in 10 years if you invest $5000 per year?

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  1. 22 August, 13:14
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    The final value is $106,607.35.

    Explanation:

    Giving the following information:

    n = 10 years

    i = 16%

    Annual deposit = $5,000

    To calculate the final value we need to use the following version of the final value formula:

    FV = {A*[ (1+i) ^n-1]}/i

    A = annual deposit

    FV = {5,000*{ (1.16^10) - 1]}/0.16 = $106,607.35
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