You want to buy a new sports car 3 years from now, and you plan to save $4,200 per year, beginning one year from today. you will deposit your savings in an account that pays 5.2% interest. how much will you have just after you make the 3rd deposit, 3 years from now?

Question

Mathematics

Kaleb Brady

6 August, 18:49

You want to buy a new sports car 3 years from now, and you plan to save $4,200 per year, beginning one year from today. you will deposit your savings in an account that pays 5.2% interest. how much will you have just after you make the 3rd deposit, 3 years from now?

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Allyson Hutchinson · Answer 1

The formula of the future value of an annuity ordinary is

Fv=pmt [ (1+r) ^ (n) - 1) : r]

Fv future value?

PMT payment per year 4200

R interest rate 0.052

N time 3 years

Fv=4,200 * (((1+0.052) ^ (3) - 1) : (0.052))

Fv=13,266.56