After graduation, you plan to work for Dynamo Corporation for 12 years and then

Question

After graduation, you plan to work for Dynamo Corporation for 12 years and then start your own business. You expect to save and deposit $7,500 a year for the first 6 years(t=1 through t=6) and $15,000 annually for the following 6 years (t=7 through t=12). The first deposit will be made a year from today. In addition, your grandfather just gave you a $25,000 graduation gift which you will deposit immediately (t=0). If the account earns 9% compounded annually, how much will you have when you start your business in 12 years from now?

Explanation / Answer

Using a TI BA II Plus calculator I entered CF0= 25,000, CF1-CF6 7,500, and CF7-CF12 15,000. Using an interest rate of 9% I get a future value of 277,797.03.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.