You are interested in saving money for your first house. Your plan is to make re

Question

You are interested in saving money for your first house. Your plan is to make regular deposits into a brokerage account which will earn 14 percent. Your first deposit of $5,000 will be made today. You also plan to make four additional deposits at the beginning of each of the next four years. Your plan is to increase your deposits by 10 percent a year. (That is, you plan to deposit $5,500 at t = 1, and $6,050 at t = 2, etc.) How much money will be in your account after five years?
a. $24,697.40 b. $30,525.00 c. $32,485.98 d. $39,362.57 e. $44,873.90
PV of an uneven CF stream

Explanation / Answer

the answer will be D) 39,362.57

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