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30 March, 07:06

A company deposits $2,378 in a bank at the end of every year for 10 years. The company makes no deposits during the subsequent 5 years. If the bank pays 10% interest, how much would be in the account at the end of 15 years?

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  1. 30 March, 10:59
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    Final Value = $61,037.04

    Explanation:

    Giving the following information:

    Investment = $2,378 in a bank at the end of every year for 10 years.

    The company makes no deposits during the subsequent 5 years.

    Interest rate = 10%

    First, we need to calculate the first 10 years.

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

    A = annual deposit

    FV = {2,378*[ (1.1^10) - 1]} / 0.1

    FV = $37,899.20

    Now, the 5 years:

    FV = PV * (1+i) ^n

    FV = 37,899.2 * (1.1^5)

    FV = $61,037.04
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