A company deposits 200O in a bank at the end oF eVcY Year fo

A company deposits $200O in a bank at the end oF eVcY Year for1Oyears.TFhe company makes no deposits durins the subscquent s years.IF the bank ast tthe cnd of 15 years2

Solution

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

Hence

A=2000(1.08)^14+2000(1.08)^13+2000(1.08)^12+..........+2000(1.08)^5

=2000[(1.08)^14+(1.08)^13+(1.08)^12+..........+(1.08)^5]

=2000*21.28551297(Approx)

=$42571.03(approx)(Please note that intermediate calculations have not been rounded off].