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worty [1.4K]
2 years ago
12

You deposit $1000 into a savings plan at the end of each

Chemistry
1 answer:
Aloiza [94]2 years ago
4 0

Answer:

FV = $3506.112

Interest = $506.112

Explanation:

We are given;

Annual deposit; A = $1000

Interest rate; i = 8% = 0.08

Number of years; n = 3

The value of the annuity after 3 years will be gotten from the formula;

FV = A[((1 + i)ⁿ - 1)/i](1 + i)

FV = 1000(((1 + 0.08)³ - 1)/0.08)(1 + 0.08)

FV = 1000(1.08⁴ - 1.08)/0.08

FV = $3506.112

Since you deposited $1000 each year, then after 3 years, total deposited = 3 × 1000 = $3000

Since FV = $3506.112, then interest = $3506.112 - $3000

Interest = $506.112

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