Question

You deposit $2,400 into an account that pays 5% per year. Your plan is to withdraw this amount at the end of 5 years to use for a down payment on a new car. How much will you be able to withdraw at the end of 5 years? Do not round intermediate calculations. Round your answer to the nearest cent.

Answer 1

3,063.08

Step-by-step explanation:

To determine how much will you be able to withdraw at the end of 5 years, we have to calculate the present value of the amount paid.

The formula for calculating future value :

FV = P (1 + r)^n

FV = Future value

P = Present value

R = interest rate

N = number of years

$2,400 (1 + 0.05)^5 = 3,063.08

I hope my answer helps you