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29 March, 04:26

Your grandmother has been putting $5,000 into a savings account on every birthday since your first (that is, when you turned 1). The account pays an interest rate of 8%. How much money will be in the account on your 18th birthday immediately after your grandmother makes the deposit on that birthday?

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  1. 29 March, 04:41
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    Final Value = $187,251.22

    Explanation:

    Giving the following information:

    Your grandmother has been putting $5,000 into a savings account on every birthday since your first (that is, when you turned 1). The account pays an interest rate of 8%.

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

    A = annual deposit

    FV = {5,000[ (1.08^18) - 1]}/0.08 = $187,251.22
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