Calculating the Total Amount in a Fund after Five Annual Deposits
Explanation:
To calculate the amount in the fund after the fifth deposit, we follow these steps:
1. Calculate the total amount for each individual deposit using the formula:
Deposit amount à (1 + interest rate)^number of years
2. Add up the total amounts of all five deposits to get the final amount.
Let's break down the calculation:
First Deposit:
$14,000 Ã (1 + 0.06)^4 = $14,000 Ã 1.26248 â $17,674.68
Second Deposit:
$12,000 Ã (1 + 0.06)^3 = $12,000 Ã 1.191016 â $14,292
Third Deposit:
$10,000 Ã (1 + 0.06)^2 = $10,000 Ã 1.1236 â $11,236
Fourth Deposit:
$8,000 Ã (1 + 0.06)^1 = $8,000 Ã 1.06 â $8,480
Fifth Deposit:
$6,000 (no interest as it's immediately after the deposit) = $6,000
Adding all the amounts together:
$17,674.68 + $14,292 + $11,236 + $8,480 + $6,000 = $57,682.68
Therefore, the amount in the fund immediately after the fifth deposit is $57,682.68.