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2 June, 08:21

You want to buy a new sports car 3 years from now, and you plan to save $4,200 per year, beginning one year from today. you will deposit your savings in an account that pays 5.2% interest. how much will you have just after you make the 3rd deposit, 3 years from now?

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  1. 2 June, 08:44
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    The formula of the future value of an annuity ordinary is

    Fv=pmt [ (1+r) ^ (n) - 1) : r]

    Fv future value?

    PMT payment per year 4200

    R interest rate 0.052

    N time 3 years

    Fv=4,200 * (((1+0.052) ^ (3) - 1) : (0.052))

    Fv=13,266.56
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