After graduation, you plan to work for Animex Corporation for 12 years and then

Question

After graduation, you plan to work for Animex Corporation for 12 years and then start your own business. You expect to save and deposit $7,500 a year for the first 6 years and $15,000 annually for the following 6 years, with the first deposit being made a year from today. In addition, your grandfather just gave you a $20,000 graduation gift which you will deposit immediately. If the account earns 7% compounded annually, how much will you have when you start your business 12 years from now?

After graduation, you plan to work for Animex Corporation for 12 years and then start your own business. You expect to save and deposit $7,500 a year for the first 6 years and $15,000 annually for the following 6 years, with the first deposit being made a year from today. In addition, your grandfather just gave you a $20,000 graduation gift which you will deposit immediately. If the account earns 7% compounded annually, how much will you have when you start your business 12 years from now?

Explanation / Answer

amount is

20000 * 1.07^12 + 7500 * ( 1.07^11 + .... + 1.07^6 ) + 15000 * ( 1.07^5 + ... + 1 ) = $232,856.90

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