Answer:
The final value is $2,252,850.70
Explanation:
Giving the following information:
Derek will deposit $8,356.00 per year for 29.00 years into an account that earns 9.00%, The first deposit is made next year.
First, we need to calculate the final value of the first 29 years using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {8,356*[(1.09^29)-1]}/0.09= 1,037,275.04
Now, we can calculate the final value of the following 9 years at an interest rate of 9%.
FV= PV*(1+i)^n
FV= 1,037,275.04*(1.09^9)= $2,252,850.70
