Respuesta :
Answer:
45,578.45
Explanation:
PV = $ -7,900 (The iniiial investment made by Andrew and Emma at year 0)
i/r = 4% (annual interest)
PMT = $ -1,200 (Annual deposit on Angela's birthday)
n = 17
FV (Value of the savings account at Angela's 17th birthday)
Using financial calculator, we have FV = $43,825
Value of the savings at Angela's 18th birthday = $43,825 x 1.04 = 45,578.45
Amount saved for 18th birthday is $43,825.42 (Approx.)
Given that;
Amount invested = $7,900
Rate = 4%
Annual deposit = $1,200
Number of year = 17
Find:
Amount saved for 18th birthday
Computation:
Future value of initial deposit = Initial deposit[1+r]ⁿ
Future value of initial deposit = 7900[1+0.04]¹⁷
Future value of initial deposit = $15,388.41
Future value of annual deposit = Annual deposit[{(1+r)ⁿ - 1}/r]
Future value of annual deposit = 1200[{(1+0.04)¹⁷ - 1}/0.04]
Future value of annual deposit = $28,437.01
Amount saved for 18th birthday = $15,388.41 + $28,437.01
Amount saved for 18th birthday = $43,825.42 (Approx.)
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