Question

ABC plans on saving $42,000, $54,000, and $58,000 at the end of each year for the next three years, respectively. How much will the firm have saved at the end of the three years if it can earn 4.5% on its savings?

Answer 1

Answer:

= $160,295.05

Explanation:

The amount the firm would have accumulated over the curse of the three years is the sum of the principal plus interest earned on the deposits.

The value of savings is determined as follows:

42,000× 1.045^(2) =  45,865.05

54,000 × 1.045^(1) =  56,430.00

58,000 = 58,000.00

=$45,865.05 + $56,430.00 + $58,000.00

= $160,295.05

Note the the last deposit of $58,000.00  will made at the end of the third year ans so bears no interest