Explanation Future value: The future value is value of present amount compounded at an interest rate until a particular future date. Complete the fund accumulation schedule: Fund Accumulation Schedule Date Cash Payment (A) Interest earned (B) Fund Increase C = ( A + B ) Fund Balance D= ( D+C ) December 31, Year1 $320,000 $0 $320,000 $320,000 December 31, Year 2 $320,000 (1) $28,800 $348,800 (3) $668,800 December 31, Year 3 $320,000 (2) $60,192 $380,192 (4) $1,048,992 Total $960,000 $88,992 $1,048,992 (Table 1) Working Notes: Interest Earned = ( Fund balance during the first year ) × Interest rate =$320,000 × 9 100 = $ 28 , 800 (1) Interest Earned =

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