College Math

E8-15 Katina Washingtin is currently employed as a computer programmer by Megatel Cpmpany . Her dream , however , is to start her own computer software firm . To provide cash to start her own business in six years she will invest 10 ,000 today . She thinks the investment will earn a 12 annual return

a ) How much would Katina have in her account at the end of 6 years if she earns 12 on the investment ? How much of this would be interest earned during the six years

FVIF 12 , 6years 1 .9738 9738 out

of the amount is 10 ,000

b ) Assume , instead , that Katina has decided she needs 20 ,000 to begin business . She wants to invest equal amounts at the end of each year for the next 6 years to accumulate the 20 ,000 needed at the time

i ) How much must be invested each year , assuming that it earns 12 interest ?20 ,000 PMT 8 .1152

PMT 20000 / 8 .1152

PMT 2465

So each year , she needs to invest 2465

ii ) How much will the investment be worth at the end of each of the next six years

Year 1 2 3 4 5 6

Begin 0 2465 5225 .8 8317 .896 11781 .04 15659 .77

Interest 0 295 .8 627 .096 998 .1475 1413 .725 1879 .172

Deposit 2465 2465 2465 2465 2465 2465...