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Contemporary Mathematics for Business and Consumers 7th Edition by Robert Brechner ,George Bergeman
Edition 7ISBN: 978-1285448596Contemporary Mathematics for Business and Consumers 7th Edition by Robert Brechner ,George Bergeman
Edition 7ISBN: 978-1285448596 Exercise 5
As part of your retirement plan, you have decided to deposit $3,000 at the beginning of each year into an account paying 5% interest compounded annually.
a. How much would the account be worth after 10 years?
b. How much would the account be worth after 20 years?
c. When you retire in 30 years, what will be the total worth of the account?
d. If you found a bank that paid 6% interest compounded annually rather than 5%, how much would you have in the account after 30 years?
e. Use the future value of an annuity due formula to calculate how much you would have in the account after 30 years if the bank in part d switched from annual compounding to monthly compounding and you deposited $250 at the beginning of each month instead of $3,000 at the beginning of each year.
a. How much would the account be worth after 10 years?
b. How much would the account be worth after 20 years?
c. When you retire in 30 years, what will be the total worth of the account?
d. If you found a bank that paid 6% interest compounded annually rather than 5%, how much would you have in the account after 30 years?
e. Use the future value of an annuity due formula to calculate how much you would have in the account after 30 years if the bank in part d switched from annual compounding to monthly compounding and you deposited $250 at the beginning of each month instead of $3,000 at the beginning of each year.
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Contemporary Mathematics for Business and Consumers 7th Edition by Robert Brechner ,George Bergeman
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