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agasfer [191]
3 years ago
5

One year ago, JK Mfg. deposited $12,000 in an investment account for the purpose of buying new equipment four years from today.

Today, it is adding another $15,000 to this account. The company plans on making a final deposit of $10,000 to the account one year from today. How much cash will be available when the company is ready to buy the equipment assuming an interest rate of 5.5%?
Business
1 answer:
Lyrx [107]3 years ago
4 0

Answer:

Total FV= $46,008.31

Explanation:

Giving the following information:

Deposit 1= $12,000

Deposit 2= $15,000

Deposit 3= $10,000

Interest rate= 0.055

<u>To calculate the future value, we need to use the following formula on each deposit:</u>

FV= PV*(1+i)^n

FV1= 12,000*(1.055^5)= 15,683.53

FV2= 15,000*(1.055^4)= 18,582.37

FV3= 10,000*(1.055^3)= 11,742.41

Total FV= $46,008.31

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