Answer:
Total future value= $408,334.38
Explanation:
Giving the following information:
A couple thinking about retirement decide to put aside $3,000 each year in a savings plan that earns 8% interest. In 5 years they will receive a gift of $10,000 that also can be invested.
First, we will determine the future value of the annual deposit investment. We need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {3,000*[(1.08^30) - 1]} / 0.08
FV= $339,849.63
Now, for the $10,000:
FV= PV*(1+i)^n
FV= 10,000*(1.08^25)
FV= $68,484.75
Total future value= 339,849.63 + 68,484.75
Total future value= $408,334.38
