On January 1, 2013, you decided to take a trip around the world after graduation

Question

On January 1, 2013, you decided to take a trip around the world after graduation. Assume that you will graduate 4 years from January 1, 2013. Your grandmother wanted to help you save money for the trip. Being the generous and sweet lady she is, your grandmother decided to deposit $3,250 in the travel fund at the end of each of the next 4 years, starting on December 31, 2013. The savings account will earn 7 percent interest.

2. What is the total amount of interest earned in this investment? (Round your final answer to the nearest whole dollar amount)

1. How much money will you have for the trip at the end of year 4? (Round your final answer to the nearest whole dollar amount.)

1. How much money will you have for the trip at the end of year 4? (Round your final answer to the nearest whole dollar amount.)

Explanation / Answer

Ans:- Amount for the trip at the end of year-4 =   3250*(1.07)^3 + 3250*(1.07)^2 + 3250*(1.07)^1 + 3250

= $144429.81

= $14430

2]What is the total amount of interest earned in this investment?

Ans:- Tota l amount of interest earned = Amount for the trip at the end of year-4

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