Question

One year ago, the Jenkins Family Fun Center deposited $4,500 into an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $6,300 to this account. They plan on making a final deposit of $8,500 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a rate of return of 8 percent rate of return?

Answer 1

Answer:

Total= $25,891

Explanation:

Giving the following information:

One year ago, the Jenkins Family Fun Center deposited $4,500 into an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $6,300 to this account. They plan on making a final deposit of $8,500 to the account next year.

We need to use the following formula:

FV= PV/(1+i)^n

FV= 4,500*(1.08)^5=6,612

FV= 6,300*(1.08)^4= 8,571

FV= 8,500*(1.08)^3= 10,708

Total= $25,891