Question

You deposit $2000 each year into an account earning 7% interest compounded annually. How much will you have in the account in 30 years?

Answer 1

The amount that will be in the account after 30 years is $188,921.57.

How much would be in the account after 30 years?

When an amount is compounded annually, it means that once a year, the amount invested and the interest already accrued increases in value. Compound interest leads to a higher value of deposit when compared with simple interest, where only the amount deposited increases in value once a year.

The formula that can be used to determine the future value of the deposit in 30 years is : annuity factor x yearly deposit

Annuity factor = {[(1+r)^n] - 1} / r

Where:

• r = interest rate
• n = number of years

$2000 x [{(1.07^30) - 1} / 0.07] = $188,921.57

To learn more about calculating the future value of an annuity, please check: brainly.com/question/24108530

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