business finance

[rouzbehh]

3. Your grandfather has been putting $1000 into a saving account on every birthday since your first. The account pays an interest rate of 3%. How much money will be in the account on your 18th birthday immediately after your grandfather makes the deposit on the birthday?

[redcrx]

what have you calculated it to be?

you cant just ask for answers to homework, you need to have a grasp on how to work it out.

[rouzbehh]

i used of future value Annuity Due for this case:

1000[(1+0.03)^18-1/0.03](1+0.03)
=24116.87

[dr b]

This is not an annuity due since the first payment was made on your first birthday (it would be an annuity due if the first payment was made on the day you were born). Use the formula for future value of a regular annuity.

[twix123]

Your calculations are way over the top (I wish that I could get your rate of return)!