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One year ago, the Jenkins Family Fun Center deposited $4,800 in an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $6,600 to this account. They plan on making a final deposit of $8,800 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a 9 percent rate of return?

a. $28,098.09
b. $26,935.83
c. $25,415.70
d. $27,185.42
e. $26,077.59

Respuesta :

facundobuzzetti

Answer:

The correct answer is A.

Explanation:

Giving the following information:

One year ago, the Jenkins Family Fun Center deposited $4,800 in an investment account to buy new equipment four years from today. Today, they are adding another $6,600 to this account. They plan on making a final deposit of $8,800 to the account next year.

i= 0.09

To calculate the final value we need to use the following formula:

FV=PV*(1+i)^n

First deposit= 4,800*(1.09)^5= 7,385.39

Second deposit= 6,600*(1.09)^4=9,316.44

Third deposit= 8,800*(1.09)^3= 11,396.26

Total= $28,098.09

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