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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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  1. 2 October, 12:45
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    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
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