On January 1, you deposited $7,700 in an investment account. The account will ea
ID: 2469114 • Letter: O
Question
On January 1, you deposited $7,700 in an investment account. The account will earn 10 percent annual compound interest, which will be added to the fund balance at the end of each year. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided.)
What will be the balance in the account at the end of 10 years? (Round your final answer to the nearest whole dollar amount.)
What is the interest for the 10 years? (Round your final answer to the nearest whole dollar amount.)
How much interest revenue did the fund earn in the first year? the second year? (Round your final answer to the nearest whole dollar amount.)
Explanation / Answer
Initial Deposit 7,700 Interest rate 10% pa Compounding factor @10% for 10 years=1.10^10= 2.5937 Balance in the account after 10 years=7700*2.5937= $ 19,971.82 Interest for 10 years=19972-7700= $ 12,271.82 Interest revenue for first year=7700*10%= 770 Invested value in 2nd year=7700+770= 8,470 Interest Revenue for the 2nd year=8470*10%= 847