You are going to deposit $22,000 today. You will earn an annual rate of 4.5 percent for 13 years, and then earn an annual rate of 3.9 percent for 16 years. How much will you have in your account in 29 years?

Question

Trevor Dominguez

Business

22 February, 04:03

You are going to deposit $22,000 today. You will earn an annual rate of 4.5 percent for 13 years, and then earn an annual rate of 3.9 percent for 16 years. How much will you have in your account in 29 years?

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Answers (1)

Know the Answer?

Abigail · Answer 1

The correct answer is $71,908.99.

Explanation:

According to the scenario, the given data are as follows:

PV = $22,000

For Time period (t1) = 13 years

Rate of interest (r1) = 4.5%

For time period (t2) = 16 years

Rate of interest (r2) = 3.9%

So, we can calculate the future value by using following formula:

FV = PV * (1+r1) ^t1 * (1 + r2) ^t2

So, by putting in the formula, we have

FV = ($22,000 * (1+4.5%) ^13) * (1+3.9%) ^16

= $71,908.99