On January 1, 2016, you deposited $6,500 in a savings account. The account will

Question

On January 1, 2016, you deposited $6,500 in a savings account. The account will earn 11 percent annual compound interest, which will be added to the fund balance at the end of each year.  

Required:
1. What will be the balance in the savings account at the end of 9 years? (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. Round your final answers to 2 decimal places.)



2. What is the total interest for the 9 years? (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. Round your final answers to 2 decimal places.)



3. How much interest revenue did the fund earn in 2016 and in 2017? (Round your final answers to 2 decimal places.)

Explanation / Answer

1) Value at the end of 9 year = 6500*2.55804 = 16627.26

2) Total interest for the 9 years = 16627.26-6500 = 10127.26

3) 2016 Interest revenue = 6500*11% = 715

2017 interest revenue = (6500+715)*11% = 793.65

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