Future value ---Jack and Jill are saving for a rainy day and decided to put $65

Question

Future value ---Jack and Jill are saving for a rainy day and decided to put $65 away in their local bank every year for the next 30 years. The local Up-the Hill Bank will pay them 5% on their account <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>

a.       If Jack and Jill put the money in the account faithfully at the end of every year. How much will they have in it at the end of 30 years?

b.      Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of saving. The medical bill has come to $800. Is there enough in the rainy-day fund to cover it?

Explanation / Answer

a) each will have 4318.52

b) 817.56 ...........so yes it is enough

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