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February 16th, 2014, 01:07 PM  #1 
Newbie Joined: Feb 2014 Posts: 2 Thanks: 0  Future value: what's wrong here?
"Thirteen years ago, you deposited $2,400 into an account. Eight years ago, you added an additional $1,000 to this account. You earned 8 percent, compounded annually, for the first 5 years and 5.5 percent, compounded annually, for the last 8 years. How much money do you have in your account today?" 2400(1.0^5+3400(1.055)^8 is the formula I'm running and coming up with $8744.32 for the answer, but that's not anywhere near the choices of: a. $4,666.67 b. $4,717.29 c. $5,411.90 d. $6,708.15 e. $6,946.59 What am I doing wrong? I have run my equation several times with special attention to order of operations and still getting same result 
February 16th, 2014, 01:18 PM  #2  
Senior Member Joined: Jun 2013 From: London, England Posts: 1,316 Thanks: 116  Re: Future value: what's wrong here? Quote:
But, then you've added $3400 and started paying interest on that. What you want to do is add $1000 to get: 2400*(1.0^5 + 1000. You then have 8 years interest on this.  
February 16th, 2014, 01:20 PM  #3 
Newbie Joined: Feb 2014 Posts: 2 Thanks: 0  Re: Future value: what's wrong here? Just figured that out and then your response confirmed my answer. Thank you!


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