Question

One year ago, JK Mfg. deposited $12,000 in an investment account for the purpose of buying new equipment four years from today. Today, it is adding another $15,000 to this account. The company plans on making a final deposit of $10,000 to the account one year from today. How much cash will be available when the company is ready to buy the equipment assuming an interest rate of 5.5 percent?

Answer 1

Answer:

Cash available after the final deposit 41,463.52

Explanation:

$Principal * (1+ r)^{time} = Ammount$

$12,000 * (1+ .055)^{5} = Ammount$

The 12,000 capitalize for 5 years

15,638,52

$15,000 * (1+ .055)^{1} = Ammount$

Capialize for 1 year

15,825

10,000 this deposit doesn't capitalize is deposit to complete and purchase the equipment

15,638.52 + 15,825 + 10,000 = 41,463.52