You currently have $3,000 in an account and plan on depositing $2,500 into the account each year, starting in one year. If the account earns an annual interest rate of 6.70%, how much will be in the account in 5 years, after making your final deposit?

After making deposits in a bank account as stated in the conditions given above, it can be inferred that an amount of approximately $15,940 will be available in the account after the end of 5 years.

What is the significance of deposits?

Deposits can be referred to or considered as such engagement of monies with any commercial bank that also provides a predetermined rate of interest to the customers making such deposit. Interest acts like a return on investment in this case.

The above condition is a case of making recurring deposits at regular intervals. Upon satisfying the conditions given above, the amount of monies in the account can be computed as below,

At the end of year 1, the Total deposit after interest earned will be

3000 + 6.70% = $3,201.

At the end of two years,

(3201 + 2500) + 6.70% = $6,083.

At the end of three years,

(6083 + 2500) + 6.70% = $9,158.

At the end of four years,

(9158 + 2500) + 6.70% = $12439.

At the end of five years,

(12439 + 2500) + 6.70% = $15,940.

Thus, it can be concluded that at the end of five years the deposits made after earning the interest will be $15,940.

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