Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 1

Computing Growth for a Savings Fund with Periodic Deposits
On January 1, 2013, you plan to take a trip : around the world upon graduation four years from now. Your grandmother wants to deposit sufficient funds for this trip in a savings' account for you. On the basis of a budget, you estimate that the trip currently would cost $15,000' Being the generous and sweet lady she is, your grandmother decided to deposit $3,500 in; the fund at the end of each of the next four years starting on December 31,2013. The savings account will earn 6 percent annual interest, which will be added to the savings account at each year end.
Required (show computations and round to the nearest dollar):
1. How much money will you have for the trip at the end of year 4 (i.e., after four deposits)
2. What is the total amount of interest earned over; the four years
3. How much interest revenue did the fund earn in 2013, 2014, 2015, and 2016