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Future value at 3rd year different rates every year

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Question: 1. How much would be in your savings account in 11 years after depositing $150 today, if the bank pays 7% per year? 2. A deposit of $350 earns the following interest rates: (a) 8% in the first year, (b) 6 in the second year, and (c) 5.5 in the third year. What would be the third year future value? Answer Savings account will have $315.73 Third year Future Value is $422.72 Explanation 1 rate or r 7% or 0.07; n or nper 11yrs; Present Value PV $150 Formula Method Future Value = Present Value * ((1+r)^n) r is the rate and n is the time period Substituting values in the formula Future Value = (150 * ((1.07)^11)) Future Value = (150 * 2.10485195) Future Value = $315.73 when rounded to 2 decimal places Note: I have not rounded any intermediate calculation Excel Method You can use the FV function in excel FV(Rate, NPER, PMT, PV, Type) rate 7%; NPER 11; PV 150 =FV(7%,11,,150) $315,73 Answer: Savings account will have $315.73 2 Present Value PV $350 Formula Method Total Future Value = Sum of Present Value * ((1+r)^n) rate or r is 8% in the first year; 6% in the second year and 5.5% in the third year and n is the respective year Substituting values in the formula i. Future Value ...
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