You want to buy a new ski boat 2 years from now,and you plan to save $7,000 per year,beginning one year from today.You will deposit your savings in an account that pays 6.2% interest.How much will you have just after you make the 2nd deposit,2 years from now?

Question

Quizplus · Accepted Answer

The total savings after two years will be:

Year 1: $7,000 saved
Year 2: $7,000 saved + $7,000 x 1.062 (interest earned) = $14,434

Therefore, just after the second deposit, two years from now, you will have $14,434 saved.

You Want to Buy a New Ski Boat 2 Years