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At the beginning of each year, Joe invests $10,000 in his retirement fund. The fund gives 10% interest, compounded annually. At the end of the third year, how much money will be in Joe's fund?

 Mar 12, 2021
 #1
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Since money is invested at beginning of periods , this is an annuity due     ....as opposed to anordinary annuity where payments are at the end of the periods

 

annuity due  calculation

 

value =   pmt * [   ( (1+i)n - 1) ] / i      *   (1+i)         

 

for this problem i = 10%  =   .10

periods = n = 3 years

pmt = 10 000

 

plug in those values to get   $ 36410

 Mar 12, 2021

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