Question

Suppose you make 30 annual investments in a fund that pays 3% compounded annually. If your first deposit is $6,000 and each successive deposit is 3% greater than the preceding deposit, how much will be in the fund immediately after the 30th deposit

Answer 1

Answer:

b

Explanation:

Answer 2

Answer:

$ 424,181.7911

Explanation:

This is the case of a growing annuity where q = 1 + i

that means he interest rate is the same as the progression in this case, both are 1.03

as the interest rate is 3% and installment increase at 3%

$C \times n \times (1+i)^{n-1}$

C = 6,000

n = 30

i = 0.03

Future value of the annuity: $ 424,181.7911 after 30 payment