What is the future worth of a series of equal year-end deposits of $3,700 for 13

Question

What is the future worth of a series of equal year-end deposits of $3,700 for 13 years in a savings account that earns 14% annual interest if the following were true? (a) All deposits are made at the end of each year? (b) All deposits are made at the beginning of each year? More Info Click the icon to view the interest factors for discrete compounding when i-14% per year. (a) The future worth of a series of equal year-end deposits made at the end of each year is S| Round to the nearest dollar Compound Compound Sinking Present Capital Amount Factor (F/A, ?' N) 1.0000 2.1400 3.4396 4.9211 6.6101 Worth Factor (P/A, i, N) 0.8772 1.6467 2.3216 2.9137 3.4331 Recovery Factor (AIP, i, N) 1.1400 0.6073 0.4307 0.3432 0.2913 Factor Factor (A/F, i, N) Factor 1.1400 1.2996 14815 1.6890 1.9254 0.8772 0.7695 0.6750 0.5921 0.5194 0.4673 0.2907 0.1513 3.8887 4.2883 2.1950 2.5023 2.8526 3.2519 3.7072 8.5355 10.7305 0.4556 0.3996 0.3506 0.3075 0.2697 0.1172 0.0932 0.0756 0.0622 0.0517 0.2572 0.2332 0.2156 0.2022 0.1917 16.0853 4.9464 19.3373 5.2161 4.2262 4.8179 5.4924 6.2613 23.0445 27 2707 32.0887 37.5811 5.4527 5.6603 5.8424 6.0021 0.1834 0.1767 0.1712 0.1666 0.0434 0.2076 0.1821 0.1597 0.0367 Enter your answer in the answer box and then click Check Answer. 0.0266 part

Explanation / Answer

a.

PMT = Payment =

$3,700.00

N = Period = 13 =

13

R = Rate =

14.00%

Future value formula for investment done end of period:

FV = (PMT x ((1+R)^N-1)/R)

FV = 3700*((1+14%)^13-1)/(14%) =

$118,728

b.

PMT = Payment =

$3,700.00

N = Period = 13 =

13

R = Rate =

14.00%

Future value formula for investment done beginning of period:

FV = (PMT x ((1+R)^N-1)/R) x (1+R)

FV = 3700*((1+14%)^13-1)/(14%)*(1+14%) =

$135,350

PMT = Payment =

$3,700.00

N = Period = 13 =

13

R = Rate =

14.00%

Future value formula for investment done end of period:

FV = (PMT x ((1+R)^N-1)/R)

FV = 3700*((1+14%)^13-1)/(14%) =

$118,728

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