John Whitten is one of the physicians on staff at Metropolis Health System. His practice is six years old. He has set up an office savings account to accumulate the funds to replace equipment in his practice. Today John is trying to figure what his equipment fund will amount to in four more years.

The equipment fund savings account presently has a balance of $63,500 and any interest earned over the next four years will be left in the account. John assumes the annual interest rate will be 5%. How much money will be in the account at the end of four more years?

 

Required

1. Compute how much money will be in the account at the end of four more years. (Use the compound interest table appearing in Appendix 13-B.)

 

APPENDIX 13-B: Compound Interest Table Compound Interest of $1.00 (The Future Amount of $1.00)

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Year	1%	2%	3%	4%	5%	6%	7%	8%	9%	10%
1	1.010	1.020	1.030	1.040	1.050	1.060	1.070	1.080	1.090	1.100
2	1.020	1.040	1.061	1.082	1.102	1.124	1.145	1.166	1.188	1.210
3	1.030	1.061	1.093	1.125	1.156	1.191	1.225	1.260	1.295	1.331
4	1.041	1.082	1.126	1.170	1.216	1.262	1.311	1.360	1.412	1.464
5	1.051	1.104	1.159	1.217	1.276	1.338	1.403	1.469	1.539	1.611
6	1.062	1.120	1.194	1.265	1.340	1.419	1.501	1.587	1.677	1.772
7	1.072	1.149	1.230	1.316	1.407	1.504	1.606	1.714	1.828	1.949
8	1.083	1.172	1.267	1.369	1.477	1.594	1.718	1.851	1.993	2.144
9	1.094	1.195	1.305	1.423	1.551	1.689	1.838	1.999	2.172	2.358
10	1.105	1.219	1.344	1.480	1.629	1.791	1.967	2.159	2.367	2.594
11	1.116	1.243	1.384	1.539	1.710	1.898	2.105	2.332	2.580	2.853
12	1.127	1.268	1.426	1.601	1.796	2.012	2.252	2.518	2.813	3.138
13	1.138	1.294	1.469	1.665	1.886	2.133	2.410	2.720	3.066	3.452
14	1.149	1.319	1.513	1.732	1.980	2.261	2.579	2.937	3.342	3.797
15	1.161	1.346	1.558	1.801	2.079	2.397	2.759	3.172	3.642	4.177
16	1.173	1.373	1.605	1.873	2.183	2.540	2.952	3.426	3.970	4.595
17	1.184	1.400	1.653	1.948	2.292	2.693	3.159	3.700	4.328	5.054
18	1.196	1.428	1.702	2.026	2.407	2.854	3.380	3.996	4.717	5.560
19	1.208	1.457	1.754	2.107	2.527	3.026	3.617	4.316	5.142	6.116
20	1.220	1.486	1.806	2.191	2.653	3.207	3.870	4.661	5.604	6.728
25	1.282	1.641	2.094	2.666	3.386	4.292	5.427	6.848	8.632	10.835
30	1.348	1.811	2.427	3.243	4.322	5.743	7.612	10.063	13.268	17.449

 

Year	12%	14%	16%	18%	20%	24%	28%	32%	40%	50%
1	1.120	1.140	1.160	1.180	1.200	1.240	1.280	1.320	1.400	1.500
2	1.254	1.300	1.346	1.392	1.440	1.538	1.638	1.742	1.960	2.250
3	1.405	1.482	1.561	1.643	1.728	1.907	2.067	2.300	2.744	3.375
4	1.574	1.689	1.811	1.939	2.074	2.364	2.684	3.036	3.842	5.062
5	1.762	1.925	2.100	2.288	2.488	2.932	3.436	4.007	5.378	7.594
6	1.974	2.195	2.436	2.700	2.986	3.635	4.398	5.290	7.530	11.391
7	2.211	2.502	2.826	3.185	3.583	4.508	5.629	6.983	10.541	17.086
8	2.476	2.853	3.278	3.759	4.300	5.590	7.206	9.217	14.758	25.629
9	2.773	3.252	3.803	4.435	5.160	6.931	9.223	12.166	20.661	38.443
10	3.106	3.707	4.411	5.234	6.192	8.594	11.806	16.060	28.925	57.665
11	3.479	4.226	5.117	6.176	7.430	10.657	15.112	21.199	40.496	86.498
12	3.896	4.818	5.936	7.288	8.916	13.215	19.343	27.983	56.694	129.746
13	4.363	5.492	6.886	8.599	10.699	16.386	24.759	36.937	79.372	194.619
14	4.887	6.261	7.988	10.147	12.839	20.319	31.691	48.757	111.120	291.929
15	5.474	7.138	9.266	11.074	15.407	25.196	40.565	64.350	155.568	437.894
16	6.130	8.137	10.748	14.129	18.488	31.243	51.923	84.954	217.795	656.840
17	6.866	9.276	12.468	16.672	22.186	38.741	66.461	112.140	304.914	985.260
18	7.690	10.575	14.463	19.673	26.623	48.039	85.071	148.020	426.879	1477.900
19	8.613	12.056	16.777	23.214	31.948	59.568	108.890	195.390	597.630	2216.800
20	9.646	13.743	19.461	27.393	38.338	73.864	139.380	257.920	836.683	3325.300
25	17.000	26.462	40.874	62.669	95.396	216.542	478.900	1033.600	4499.880	25251.000
30	29.960	50.950	85.850	143.371	237.376	634.820	1645.500	4142.100	24201.432	191750.000