On January 1, you plan to take a trip around the world upon graduation four years from now. Your grandmother wants to deposit sufficient funds for this trip in an investment account for you. On the basis of a budget, you estimate that the trip currently would cost $15,000. Being the generous and sweet lady she is, your grandmother decided to deposit $3,500 in the fund at the end of each of the next four years, starting on December 31, 2021. The account will earn 6 percent annual interest, which will be added to the account at each year-end. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1. Financial Calculator) (Use tables, Excel, or a financial calculator.) Required: 1. How much money will you have for the trip at the end of year 4 (i.e., after four deposits)? 2. What is the total amount of interest earned over the four years? 3. How much interest revenue did the fund earn in each of the four years, starting in 2021? Complete this question by entering your answers in the tabs below. Required 11 Required 2 Required 31 How much money will you have for the trip at the end of year 4 (ie, after four deposits)? (Round your final answer to the nearest whole dollar amount.) Balance in the Fund
On January 1, you plan to take a trip around the world upon graduation four years from now. Your grandmother wants to deposit sufficient funds for this trip in an investment account for you. On the basis of a budget, you estimate that the trip currently would cost $15,000. Being the generous and sweet lady she is, your grandmother decided to deposit $3,500 in the fund at the end of each of the next four years, starting on December 31, 2021. The account will earn 6 percent annual interest, which will be added to the account at each year-end. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1. Financial Calculator) (Use tables, Excel, or a financial calculator.) Required: 1. How much money will you have for the trip at the end of year 4 (i.e., after four deposits)? 2. What is the total amount of interest earned over the four years? 3. How much interest revenue did the fund earn in each of the four years, starting in 2021? Complete this question by entering your answers in the tabs below. Required 11 Required 2 Required 31 How much money will you have for the trip at the end of year 4 (ie, after four deposits)? (Round your final answer to the nearest whole dollar amount.) Balance in the Fund
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 33P
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Transcribed Image Text:On January 1, you plan to take a trip around the world upon graduation four years from now. Your grandmother wants to deposit
sufficient funds for this trip in an investment account for you. On the basis of a budget, you estimate that the trip currently would cost
$15,000. Being the generous and sweet lady she is, your grandmother decided to deposit $3,500 in the fund at the end of each of the
next four years, starting on December 31, 2021. The account will earn 6 percent annual interest, which will be added to the account at
each year-end. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1. Financial Calculator)
(Use tables, Excel, or a financial calculator.)
Required:
1. How much money will you have for the trip at the end of year 4 (i.e., after four deposits)?
2. What is the total amount of interest earned over the four years?
3. How much interest revenue did the fund earn in each of the four years, starting in 2021?
Complete this question by entering your answers in the tabs below.
Required 1
Required
Required 2
How much money will you have for the trip at the end of year 4 (i.e., after four deposits)? (Round your final answer to the
nearest whole dollar amount.)
Balance in the Fund
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