You decide to begin saving toward the purchase of a new car in 5 years. If you
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Question:
You decide to begin saving toward the purchase of a new car in 5 years. If you put $1,000 in a saving account at the end of each of the next 5 years (the account pays 6% interest) compounded annually, how much will you have after 5 years?
Time | Opening Balance | Interest | Total Balance | Deposits | Closing Balance |
1.00 | - | - | - | 1,000.00 | 1,000.00 |
2.00 | 1,000.00 | 60.00 | 1,060.00 | 1,000.00 | 2,060.00 |
3.00 | 2,060.00 | 123.60 | 2,183.60 | 1,000.00 | 3,183.60 |
4.00 | 3,183.60 | 191.02 | 3,374.62 | 1,000.00 | 4,374.62 |
5.00 | 4,374.62 | 262.48 | 4,637.09 | 1,000.00 |
Refer to question 4. What would be the ending amount of your savings if $500 payments were made at the end of each 6 month period for five years and the account paid 6% compounder semi-annually?
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