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?

Guest Mar 12, 2021

#1**+1 **

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

ElectricPavlov Mar 12, 2021