If you deposit a total $13,700 in a 5 year period into a growth mutual fund that earns 11% per year, how much should the fund be worth at the end of 5 years. And how much interest have you earned in total?
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Each year deposit= 13700/5=2740.
So in year 1. 2740+2740*.11=P1
In year 2: (P1+2740)+(P1+2740)*.11=P2
In year 3: (P2+2740)+(P2+2740)*.11=P3
In year 4: (P3+2740)+(P3+2740)*.11=P4
In Year 5: (P4+2720)+(P4+2720)*.11=P5
P5 is the total amount.
Interest is: 2740*.11+(P1+2740)*.11+(P2+2740)*.11+(P3+2740)*.11+(P4+2740)*.11
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