Belle opens an investment account on April 1, 2011. At that time she deposits $2

Question

Belle opens an investment account on April 1, 2011. At that time she deposits $2,500 into her account. The account will earn 5% annually. If she repeats this deposit for the next 14 years, how much will she have in her account on March 31, 2026, (the end of the fifteenth year)?

Belle opens an investment account on April 1, 2011. At that time she deposits $2,500 into her account. The account will earn 5% annually. If she repeats this deposit for the next 14 years, how much will she have in her account on March 31, 2026, (the end of the fifteenth year)?

Explanation / Answer

Hi,

Please find the answer as follows:

You need to calculate future value of Annuity Due in the given case:

= 2500*[(1+.05)^15 - 1)/.05]*(1+.05) = 56643.73

Belle will have 56643.73 in her account at the end of 15 years.

Thanks.

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