This is a problem of future value of a series of payments, also known as an annuity. The formula for the future value of an annuity is:

FV = P * [(1 + r)^n - 1] / r

where:
- FV is the future value of the annuity
- P is the amount of each payment (in this case, $5000)
- r is the interest rate per period (in this case, 10% or 0.10)
- n is the number of periods (in this case, 5 years)

Substituting the given values into the formula, we get:

FV = 5000 * [(1 + 0.10)^5 - 1] / 0.10

Solving the equation step by step:

1. Calculate (1 + 0.10)^5 = 1.61
2. Subtract 1 from the result: 1.61 - 1 = 0.61
3. Multiply the result by the payment: 0.61 * 5000 = $3050
4. Divide the result by the interest rate: 3050 / 0.10 = $30500

So, the fund will yield $30500 at the end of five years.

Question

This is a problem of future value of a series of payments, also known as an annuity. The formula for the future value of an annuity is:

FV = P * [(1 + r)^n - 1] / r

where:
- FV is the future value of the annuity
- P is the amount of each payment (in this case, $5000)
- r is the interest rate per period (in this case, 10% or 0.10)
- n is the number of periods (in this case, 5 years)

Substituting the given values into the formula, we get:

FV = 5000 * [(1 + 0.10)^5 - 1] / 0.10

Solving the equation step by step:

1. Calculate (1 + 0.10)^5 = 1.61
2. Subtract 1 from the result: 1.61 - 1 = 0.61
3. Multiply the result by the payment: 0.61 * 5000 = $3050
4. Divide the result by the interest rate: 3050 / 0.10 = $30500

So, the fund will yield $30500 at the end of five years.

Knowee AI · Accepted Answer

This is a problem of future value of a series of payments, also known as an annuity. The formula for the future value of an annuity is:

FV = P * [(1 + r)^n - 1] / r

where:
- FV is the future value of the annuity
- P is the amount of each payment (in this case, $5000)
- r is the interest rate per period (in this case, 10% or 0.10)
- n is the number of periods (in this case, 5 years)

Substituting the given values into the formula, we get:

FV = 5000 * [(1 + 0.10)^5 - 1] / 0.10

Solving the equation step by step:

1. Calculate (1 + 0.10)^5 = 1.61
2. Subtract 1 from the result: 1.61 - 1 = 0.61
3. Multiply the result by the payment: 0.61 * 5000 = $3050
4. Divide the result by the interest rate: 3050 / 0.10 = $30500

So, the fund will yield $30500 at the end of five years.

Tofinancethepurchaseofamachinein5years,acompanysaves5000attheendof eachyearinafundwhichgivesaninterestof10%perannum.Howmuchwillthisyield attheendoffiveyears

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