Question

A deposit of $800 is planned for the end of each year into an account paying 8 percent/year compounded annually. The deposits were not made for the tenth and eleventh years. All other deposits were made as planned. What amount will be in the account after the deposit at the end of year 25?

Answer 1

Answer:

The amount in 23 years will be A = $4697.17

Explanation:

Using the Formula

A = P(1 + r/n)${nt}$

Where:

A deposit of (Principle) $800

Interest Rate =8% or 0.08

Compounded annually  (t) = 1

Number of years  (n) = 25-2 = 23 years

Applying the figures into the formula:

A = 800(1 + 0.08/1)${1 *23}$

A = 800(1 x 0.08)${23}$

A = 800(1.08)${23}$

A = 800(5.8715)

A = $4697.17