Question

One year ago, Deltona Motor Parts deposited $17,500 in an investment account for the purpose of buying new equipment three years from today. Today, it is adding another $21,000 to this account. The company plans on making a final deposit of $13,000 to the account one year from today. How much will be available when it is ready to buy the equipment, assuming the account pays 5.5 interest

Answer 1

Answer:

$58,445.13

Explanation:

Calculation for How much will be available when it is ready to buy the equipment, assuming the account pays 5.5 interest

Using this formula

FV= PV*(1+i)^n

Let plug in the formula

First deposit= 17,500*(1.055^4)

First deposit= $19,316.73

Second deposit=21 ,000*(1.055^3)

Second deposit= $24,659.07

Third deposit= 13,000*(1.055^2)=

Third deposit=$14,469.33

Total= $58,445.13

Therefore How much will be available when it is ready to buy the equipment, assuming the account pays 5.5 interest is $58,445.13