Your cousin wants to go on a trip 4 years from now and she c

Your cousin wants to go on a trip 4 years from now, and she can save $3,000 per year, beginning one year from today. She plans to deposit the funds in a mutual fund that will return 8.5% per year. Under these conditions, how much would she have just after she makes the 4th deposit, 4 years from now? (Show all your work)

Solution

Year Deposits FVF @ 8.5% Future Values 1 3000 1.27729 3831.87 2 3000 1.17723 3531.68 3 3000 1.085 3255 4 3000 1 3000 Amount at the end of 4th deposit 13619 Amount in accounts after 4th deposit: $ 13619