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18 November, 07:31

Suppose you invest $2500 each year in a savings account that earns 12% per year. How much will be in the account in 10 years?

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  1. 18 November, 08:01
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    Final Value = $43,871.84

    Explanation:

    Giving the following information:

    Suppose you invest $2500 each year in a savings account that earns 12% per year.

    Number of years = 10

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

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

    A = annual deposit = 2,500

    i = 0.12

    n=10

    FV = {2,500*[ (1.12^10) - 1]}/0.12 = $43,871.84
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