A grandmother opens an investment account for her only granddaughter on the day she was born, investing $700. Each year on her birthday, she deposits another $700, making the last deposit on her 24th birthday. If the account paid a return rate of 7.3% compounded annually, how much is in the account at the end of the day on the granddaughter's 24th birthday? The grandmother's deposits form an annuity due because the deposits are made at the (1+i)n +1. beginning of each period. Therefore, the formula FV = PMT be used with one additional payment added. - PMT should The amount in the account at the end of the day on the granddaughter's 24th birthday is $ (Do not round until the final answer. Then round to the nearest cent as needed.)
A grandmother opens an investment account for her only granddaughter on the day she was born, investing $700. Each year on her birthday, she deposits another $700, making the last deposit on her 24th birthday. If the account paid a return rate of 7.3% compounded annually, how much is in the account at the end of the day on the granddaughter's 24th birthday? The grandmother's deposits form an annuity due because the deposits are made at the (1+i)n +1. beginning of each period. Therefore, the formula FV = PMT be used with one additional payment added. - PMT should The amount in the account at the end of the day on the granddaughter's 24th birthday is $ (Do not round until the final answer. Then round to the nearest cent as needed.)
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 24P
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Transcribed Image Text:A grandmother opens an investment account for her only granddaughter on the day she
was born, investing $700. Each year on her birthday, she deposits another $700, making the
last deposit on her 24th birthday. If the account paid a return rate of 7.3%
compounded annually, how much is in the account at the end of the day on the granddaughter's
24th birthday?
The grandmother's deposits form an annuity due
beginning of each period. Therefore, the formula FV = PMT
be used with one additional payment added.
because the deposits are made at the
(1 + i)^+1_
- PMT should
The amount in the account at the end of the day on the granddaughter's 24th birthday is $
(Do not round until the final answer. Then round to the nearest cent as needed.)
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