Answer:
FV= $1,309,832.57
Explanation:
Giving the following information:
Annual investment (1 to 7)= $3,500
Interest rate= 9%
First, we need to calculate the future value of the annual deposit using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {3,500*[(1.09^7) - 1]} / 0.09
FV= $32,201.52
Now, the value when they are 70:
Number of periods= 70 - 27= 43
FV= PV*(1+i)^n
FV= 32,201.52*(1.09^43)
FV= $1,309,832.57
The future value is $1,309,832.57
Annual investment (1 to 7) should be $3,500
Interest rate= 9%
Now the following formula should be used.
Present value is
[tex]= {A \times [(1+interest\ rate)^n-1]} \div interest\ rate\\\\= {3,500 \times [(1.09^7) - 1]} \div 0.09[/tex]
= $32,201.52
Now,
The values when they are 70:
Number of periods should be
= 70 - 27= 43
Now
[tex]FV= PV \times (1+i)^n\\\\= 32,201.52 \times (1.09^{43})[/tex]
= $1,309,832.57
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