ezto.mheducation.com 2017FS ACCTCY 2036 On each December 31, you plan to transfe
ID: 2575811 • Letter: E
Question
ezto.mheducation.com 2017FS ACCTCY 2036 On each December 31, you plan to transfer $2,300 from your checkin The investment account will eam 5 percent annual interest each year-end. The first deposit will be made December 31, 2015 (at the end of the period). (Future Value of S1. Present Value of $1. Future Value Annuity of $1 appropriate factor(s) from the tables provided.) g account into an investment account (Use Required: 1. What will be the balance in the account at the end of the 10th year (i.e., 10 deposits)? (Round your final answer to the nearest whole dollar amount.) Table or Calculator Function: Annuity payments Future Value: 2. What is the total amount of interest eamed on the 10 deposits? (Round your final answer to the nearest whole dollar amount.) 3. How much interest revenue did the fund earn in 2016? 2017? (Round your final answer to the nearest whole dollar amount.) 2016 2017Explanation / Answer
P = PMT [((1 + r)n - 1) / r]
P = 2300 * [ {(1+0.05)10 - 1} / 0.05 ]
P = 28,929.15
Total amount of interest earned on 10 Deposits =
= 28929.15 - (2300*10)
= 5929.15
Interest revenue earned in
1st year = 2300*0.05 = 115
2nd year = (2300+2300+115) * 0.05 = 235.75
Table or calculator function: Annuity payments $2300 n= 10 i= 5 % future value 28,929.15Related Questions
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