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Sagot :
Answer:
You will have saved $69,612 after five years.
Step-by-step explanation:
This can be calculated using the for formula for calculating the future value of a growing annuity as follows:
FV = C * (((1 + r)^n - (1 + g)^n) / (r - g)) ……………………………………… (1)
Where;
FW = future value or amount you will have saved after five years = ?
C = first deposit = $1,000
r = periodic monthly interest rate of = 0.4%, or 0.004
g = growth rate of contribution = 0.1%, or 0.001
n = number of months = 5 years * 12 = 60
Substituting all the values into equation (1), we have:
FV = $1,000 * (((1 + 0.004)^60 - (1 + 0.001)^60) / (0.004 - 0.001))
FV = $1,000 * 69.612001854052
FV = $69,612.00
Therefore, you will have saved $69,612 after five years.
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