Lindsey plans to deposit her annual bonus into a savings account that pays 3% interest compounded annually. The size of her bonus increases by $1000 each year, and the initial bonus amount she will deposit at the end of year 1 is $2,500. Determine how much will be in the account immediately after the 6th deposit. b) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8)? c) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8), but also plans to skip the deposits at the end of years 3 and 6?
Lindsey plans to deposit her annual bonus into a savings account that pays 3% interest compounded annually. The size of her bonus increases by $1000 each year, and the initial bonus amount she will deposit at the end of year 1 is $2,500. Determine how much will be in the account immediately after the 6th deposit. b) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8)? c) What's the future value if she only plans to deposit her annual bonus for 8 years (the last deposit is at the end of year 8), but also plans to skip the deposits at the end of years 3 and 6?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Lindsey plans to deposit her annual bonus into a savings account that pays 3% interest
compounded annually. The size of her bonus increases by $1000 each year, and the initial bonus
amount she will deposit at the end of year 1 is $2,500.
a) Determine how much will be in the account immediately after the 6th deposit.
b) What's the future value if she only plans to deposit her annual bonus for 8 years (the last
deposit is at the end of year 8)?
c) What's the future value if she only plans to deposit her annual bonus for 8 years (the last
deposit is at the end of year 8), but also plans to skip the deposits at the end of years 3 and
6?
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