Answer:
$97,331.30
Explanation:
To calculate the amount available on the daughter's 18th birthday the following should be taken into cognisance
First, the yearly deposit increases by 5% every year, therefore year one is $2,000 but year 2 is $2,000 x1.05= $2,100 and continuing like that.
Secondly, the total deposit pre year is calculated as annual deposit for the year (1+interest rate)∧year on a descending basis.
It is therefore as follows;
Years Annual deposit Total value of deposit including interest
1 $2,000.00 $2,000(1+0.07)∧17= $6,317.63
2 $2,100.00 $2,100(1+0.07)∧16= $6,199.54
3 $2,205.00 $2,205(1+0.07)∧15=$6,083.66
4 $2,315.25 $2,315.25(1+0.07)∧14=$5,969.95
5 $2,431.01 $2,431.01(1+0.07)∧13=$5,858.36
6 $2,552.56 $2,552.56(1+0.07)∧12=$5,748.86
7 $2,680.19 $2,680.19(1+0.07)∧11=$5,641.41
8 $2,814.20 $2,814.20(1+0.07)∧10=$5,535.96
9 $2,954.91 $2,954.91(1+0.07)∧9=$5,432.48
10 $3,102.66 $3,102.66(1+0.07)∧8=$5,330.94
11 $3,257.79 $3,257.79(1+0.07)∧7=$5,231.30
12 $3,420.68 $3,420.68(1+0.07)∧6=$5,133.52
13 $3,591.71 $3,591.71(1+0.07)∧5=$5,037.56
14 $3,771.30 $3,771.30(1+0.07)∧4=$4,943.40
15 $3,959.86 $3,959.86(1+0.07)∧3=$4,851.00
16 $4,157.86 $4,157.86(1+0.07)∧2=$4,760.33
17 $4,365.75 $4,365.75(1+0.07)∧1=$4,671.35
18 $4,584.04 $4,584.04(1+0.07)∧0=$4,584.04
Total $56,264.77 $97,331.30
