Question

You plan to save $6,500 per year for the next 8 years. After the last deposit, you will keep the money in the account for 6 more years. The account will earn an interest rate of 6.8 percent. How much will there be in the account 14 years from today

Answer 1

Answer:

$98,254.57

Explanation:

Value after 8 years

Future Value of Annuity = P * ((1 + r)^n - 1 ) / r

Future Value of Annuity = 6500 * ((1 + 6.8%)^8 - 1) / (6.8%)

Future Value of Annuity = 6500 * [(1.69266113113-1) / 0.068]

Future Value of Annuity = 6500 * 10.18619

Future Value of Annuity = $66,210.24

Value after 14 years

FV = PV * (1 + r )^n

FV = 66210.26*(1+ 6.8%)^6

FV = 66210.26 * 1.483978

FV = $98,254.57

So, the amount that will be there in the account 14 years from today is $98,254.57.