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14 January, 05:17

Derek will deposit $8,356.00 per year for 29.00 years into an account that earns 9.00%, The first deposit is made next year. How much will be in the account 38.00 years from today?

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  1. 14 January, 05:45
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    The final value is $2,252,850.70

    Explanation:

    Giving the following information:

    Derek will deposit $8,356.00 per year for 29.00 years into an account that earns 9.00%, The first deposit is made next year.

    First, we need to calculate the final value of the first 29 years using the following formula:

    FV = {A*[ (1+i) ^n-1]}/i

    A = annual deposit

    FV = {8,356*[ (1.09^29) - 1]}/0.09 = 1,037,275.04

    Now, we can calculate the final value of the following 9 years at an interest rate of 9%.

    FV = PV * (1+i) ^n

    FV = 1,037,275.04 * (1.09^9) = $2,252,850.70
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