On January 1, you plan to take a trip around the world upon graduation four years from now. Yourgrandmother wants to deposit sufficient funds for this trip in an investment account for you. On thebasis of a budget, you estimate that the trip currently would cost $15,000. Being the generous andsweet lady she is, your grandmother decided to deposit $3,500 in the fund at the end of each of thenext four years, starting on December 31, 2015. The account will earn 6 percent annual interest,which will be added to the account at each year-end.Required (show computations and round to the nearest dollar):1. How much money will you have for the trip at the end of year 4 (i.e., after four deposits)?2. What is the total amount of interest earned over the four years?3. How much interest revenue did the fund earn in 2015, 2016, 2017, and 2018?
On January 1, you plan to take a trip around the world upon graduation four years from now. Your
grandmother wants to deposit sufficient funds for this trip in an investment account for you. On the
basis of a budget, you estimate that the trip currently would cost $15,000. Being the generous and
sweet lady she is, your grandmother decided to deposit $3,500 in the fund at the end of each of the
next four years, starting on December 31, 2015. The account will earn 6 percent annual interest,
which will be added to the account at each year-end.
Required (show computations and round to the nearest dollar):
1. How much money will you have for the trip at the end of year 4 (i.e., after four deposits)?
2. What is the total amount of interest earned over the four years?
3. How much interest revenue did the fund earn in 2015, 2016, 2017, and 2018?
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