(Related to Checkpoint 5.2) (Future value) If you deposit $2,500 today into an a

Question

(Related to Checkpoint 5.2) (Future value) If you deposit $2,500 today into an account earning an annual rate of return of 9 percent, what would your account be worth in 35 years (assuming no further deposits)? In 40 years? 6. a. If you deposit $2,500 today into an account earning an annual rate of return of 9 percent, what would your account be worth in 35 years? Round to the nearest cent.) b. If you deposit $2,500 today into an account eaming an annual rate of return of 9 percent, what would your account be worth in 40 years? (Round to the nearest cent.)

Explanation / Answer

a)Amount in 35 years =FVF 9%,35 *Amount invested

               = 20.41397 * 2500

                 = $ 51034.92

b)Amount in 40 years =FVF 9%,40*a

             = 31.40942*2500

             = $ 78523.55

**FVF =[1+i]^n

so for 35 years ,FVF =[1+.09]^35

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