To save for a new car, Samuel Smith will invest $3,000 at the end of each year for the next 5 years. The interest rate is 8%. What is the future value?

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ahmedgodtrust ahmedgodtrust · Answer 1 · 2019-12-06T20:11:34+01:00

Answer: FV = A((1 + r)n - 1)/r

FV = $3,000((1 + 0.08)5 - 1)/0.08

FV = $3,000((1.08)5 - 1)/0.08

FV = $3,000(1.4693280768 - 1)/0.08

FV = $3,000(0.4693280768)/0.08

FV = $3,000 x 5.86660096

FV = $17,599.80

Explanation: The question relates to future value of an ordinary annuity. The variables are defined below:

FV = Future value = ?

A = Annuity per period = $3,000

n = No of years = 5 years

r = Interest rate = 8% = 0.08

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andromache andromache · Answer 2 · 2021-12-23T12:15:21+01:00

The future value is $17,599.80.

Given that,

To save for a new car, Samuel Smith will invest $3,000 at the end of each year for the next 5 years.
The interest rate is 8%.

Based on the above information, the calculation is as follows:

= $3,000((1 + 0.08)^5 - 1) ÷0.08

= $3,000((1.08)^5 - 1) ÷ 0.08

= $3,000(1.4693280768 - 1) ÷ 0.08

= $3,000(0.4693280768) ÷ 0.08

= $3,000 × 5.86660096

= $17,599.80

Learn more: brainly.com/question/17429689