Solve the problem.
-Lou has an account with $\$ 10,000$ which pays $6 \%$ interest compounded annually. If to that account, Lou deposits $\$ 5000$ at the end of each year for 3 years, find out the amount in the account after the last deposit.
A) $\$ 25,918.00$
B) $\$ 15,918.00$
C) $\$ 27,718.00$
D) $\$ 27,828.16$

Question

Quizplus · Accepted Answer

The account grows with compound interest and additional deposits. Calculate the future value of the initial amount and each deposit separately, then sum them. The future value of the initial $\$10,000$ after 3 years is $\$10,000 \times (1.06)^3$. Each $\$5,000$ deposit grows for fewer years: the first deposit for 2 years, the second for 1 year, and the last for 0 years. Sum these values to find the total amount.

Solve the Problem $10,000\$ 10,000$10,000 Which Pays 6%6 \%6% Interest Compounded Annually $5000\$ 5000$5000

Solve the Problem $\$ 10,000$ Which Pays $6 \%$ Interest Compounded Annually $\$ 5000$