Question: please help. (answer not correct) thank you! included the error message it gave me Calculating deposit needed You put $5,000 in an account earning 6%.

Calculating deposit needed You put $5,000 in an account earning 6%. After 3 years, you make another deposit into the same account. Five years later (that is, 8 years after your original $5,000 deposit), the account balance is $20,000. What was the amount of the deposit at the end of year 3? The amount of the deposit at the end of year 3 is $ 6691.13. (Round to the nearest cent.) This is a 3-step solution. First, compute the future value of the original $5,000 deposit at the end of year 8. Then compute the difference between the total account balance and the future value of the original deposit at the end of year 8. Finally, compute the present value by discounting the amount of the difference back to the end of year 3 to find the amount of the second deposit. (1) The general equation for the future value at the end of period n is: FV,=PVx(1 + r)". where FV, - future value at the end of period n PV = initial principal, or present value r= annual rate of interest paid n=number of periods that the money is left on deposit Alternatively, you can find the future value using a financial calculator or an Excel spreadsheet. When solving for the future value of a single cash flow using a financial calculator, you will need to input the values of N, 1/Y, PMT, and PV. Make sure you enter a zero for, which is not used in the problem. When solving for the future value of a single cash flow using an Excel spreadsheet, you will need to enter the values of Rate, Nper, Pv, Pmt, and Type into the future value function. (2) Subtract the future value you computed in the previous step from the total account balance of $20,000 to find the difference. (3) The present value, PV, of some future amount, FV, to be received n periods from now, assuming an interest rate (or opportunity cost of r. is calculated as follows: PV= FV) 4
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
