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
