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You plan to deposit $4,500 at the end of each of the next 20 years into an account paying 9.7 percent interest. a. How much money will you have in the account in 20 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. How much will you have if you make deposits for 40 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Respuesta :

Answer:

a. $249,119.02

b. $1,835,982.10

Explanation:

a. The computation is shown below:

= Annuity × {( 1 + interest rate) ^ time period - 1} ÷ interest rate

= $4,500 × {( 1 + 0.097 ^ 20 years - 1} ÷ 0.097

= $4,500 × 55.3597842916

= $249,119.02

b. The computation is shown below:

= Annuity × {( 1 + interest rate) ^ time period - 1} ÷ interest rate

= $4,500 × {( 1 + 0.097 ^ 40 years - 1} ÷ 0.097

= $4,500 × 407.9960231145

= $1,835,982.10

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