If Mr. Hobbit deposits $2,000 at the end of each year for the next 10 yrs at the intrest rate of 12% per year, how much will have accumulated? How much will he have accumulated if he deposited the amounts at the beginning of each year?

Question

If Mr. Hobbit deposits $2,000 at the end of each year for the next 10 yrs at the intrest rate of 12% per year, how much will have accumulated?  How much will he have accumulated if he deposited the amounts at the beginning of each year?

economyst · Answer

An Excel spreadsheet is very helpful in these types of problems.

At the end of year 1, account=2000
At the end of year 2, account=2000*1.12+2000=4240
At the end of year 3, account=4240*1.12+2000=6748.8

Take it from here.