An individual deposits an annual bonus into a savings account that pays 6% inter

Question

An individual deposits an annual bonus into a savings account that pays 6% interest account immediately after the fifth deposit. annually. The size of the bonus increases by $4,500 each year, and the initial bonus amount was $20,000. Determine how much will be in the Click the icon to view the interest factors for discrete compounding when 1-6% per year Immediately after the fifth deposit there will be $thousand in the account.(Round to the nearest whole number More Info Sinking Gradient Gradient Uniform Present Amount Factor (FIA, i, N) 1.0000 2.0600 3.1836 4.3746 5.6371 Factor (A/F, i, N) Factor (Fip, i, N) 1.0600 1.1236 1.1910 1.2625 1.3382 Factor (PF, i, N) 0.9434 0.8900 0.8396 0.7921 0.7473 Factor (PIA, i, N) 0.9434 1.8334 2.6730 Factor (AP, i, N) 0.4854 0.3141 0.2286 0.1774 0.5454 0.3741 0.2886 0.2374 0.0000 0.4854 0.9612 1.4272 1.8836 0.0000 0.8900 2.5692 4.9455 7.9345 4.2124 1.4185 1.5036 1.5938 1.6895 1.7908 0.7050 0.6651 0.6274 0.5919 0.5584 6.9753 8.3938 9.8975 11.4913 13.1808 0.1434 0.1191 0.1010 0.0870 0.0759 4.9173 5.5824 6.2098 6.8017 7.3601 0.2034 0.1791 0.1610 0.1470 0.1359 2.3304 2.7676 3.1952 3.6133 4.0220 11.4594 15.4497 19.8416 24.5768 29.6023 Enter your answer in the answer box and then click Check Answer

Explanation / Answer

To determine how much is available in the account after the 5thdeposit we are determining a single future amount at yr5.

$20000*(P/A,6%,5) + $4500*(P/G,6%,5) = $20000*(4.2124)+ $4500*(7.9345) = $119953.25

Convert this present amount to a future amount at t=5

$119953.25* (F/P,6%,5) = $119953.25(1.3382) = $160521.44

161 Thousand

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