Assume you deposit $5,000 at the end of each year into an account paying 9.5 per

Question

Assume you deposit $5,000 at the end of each year into an account paying 9.5 percent interest.

How much money will you have in the account in 19 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

How much will you have if you make deposits for 38 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Assume you deposit $5,000 at the end of each year into an account paying 9.5 percent interest.

Explanation / Answer

1.

FV = Annuity*Future value interest factor = A*(F/A(9.5%, 19years) = 5000*48.5134 = $242,567

2.

FV = A*(F/A(9.5%, 38years) = 5000*320.6146= 1,603,073

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