If you deposit $6,100 at the end of each of the next 15 years into an account pa

Question

If you deposit $6,100 at the end of each of the next 15 years into an account paying 11.30 percent interest, how much money will you have in the account in 15 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

How much will you have if you make deposits for 30 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

If you deposit $6,100 at the end of each of the next 15 years into an account paying 11.30 percent interest, how much money will you have in the account in 15 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Future Value = Annual payment x Future Value Interest Factor of Annuity

Here,

Annual payment = $6,100

Interest rate = 11.3%

Number of years = 15

Future Value Interest Factor of Annuity (11.3%, 15 years) = 35.2413 (From FVIFA table) **

So, Future Value = $6100 x 35.2413 = $214,971.93

If number of years = 30,

Future Value Interest Factor of Annuity (11.3%, 30 years) = 210.8233 (From FVIFA table) **

Future Value = $6100 x 210.8233 = $1,286,022.13

** Future Value Interest Factor of Annuity Formula = [(1 + Interest Rate)Number of years -1] / Interest Rate

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