On January 1, you deposited $6,000 in an investment account. The account will earn 10 percent annual compound interest, which will be added to the fund balance at the end of each year. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1)

Required:

a. What will be the balance in the account at the end of 10 years?

b. What is the interest for the 10 years?

Question

Business

Amya Donovan

29 November, 18:33

On January 1, you deposited $6,000 in an investment account. The account will earn 10 percent annual compound interest, which will be added to the fund balance at the end of each year. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1)

Required:

a. What will be the balance in the account at the end of 10 years?

b. What is the interest for the 10 years?

+3

Answers (1)

Know the Answer?

Giana Rios · Answer 1

a. The balance in the account at the end of 10 years = $15,562.45

b. The interest for the 10 years=$9,562.45

Explanation:

a. Future Value (S) = P (1+i) ^n

(S) = 6000 (1+0.10) ^10

=$15,562.45

b. Interest=Future value-Deposited

I=S-P or I=FV - PV

I=15,562.45-6,000

I=9,562.45