Periodic Deposit $1000 at the end of each year Rate 6 % compounded annually Time
ID: 2813771 • Letter: P
Question
Periodic Deposit $1000 at the end of each year Rate 6 % compounded annually Time 35 years a. Use the following formula to find the value of the annuity. Upper A equals StartFraction Upper P left bracket left parenthesis 1 plus r right parenthesis Superscript t Baseline minus 1 right bracket Over r EndFraction b. Find the interest. a. After 35 years, you will have approximately $ nothing. (Do not round until the final answer. Then round to the nearest dollar as needed. Do not include the $ symbol in your answer.) b. The interest is approximately $ nothing. (Use the answer from part a to find this answer. Round to the nearest dollar as needed. Do not include the $ symbol in your answer.)
Explanation / Answer
A = P * [ (1+r)n - 1 ] / r
= 1000 * [ (1.06)35 - 1 ] / 0.06
= 111,434.78
a. After 35 years, you will have approximately 111,434.78
b. The interest is approximately 76434.78
For Interest we deduct the principle from total amount ..... i.e 111,434.78 - (35 * 1000)
= 111,434.78 - 35,000 = 76434.78