One year ago, the Jenkins Family Fun Center deposited $4,500 into an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $6,300 to this account. They plan on making a final deposit of $8,500 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a rate of return of 8 percent rate of return?

Question

Deegan

Business

2 October, 12:39

One year ago, the Jenkins Family Fun Center deposited $4,500 into an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $6,300 to this account. They plan on making a final deposit of $8,500 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a rate of return of 8 percent rate of return?

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Answers (1)

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Rodriguez · Answer 1

Total = $25,891

Explanation:

Giving the following information:

One year ago, the Jenkins Family Fun Center deposited $4,500 into an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $6,300 to this account. They plan on making a final deposit of $8,500 to the account next year.

We need to use the following formula:

FV = PV / (1+i) ^n

FV = 4,500 * (1.08) ^5=6,612

FV = 6,300 * (1.08) ^4 = 8,571

FV = 8,500 * (1.08) ^3 = 10,708

Total = $25,891