Question

Walter wants to deposit $1,500 into a certificate of deposit at the end of each ofthe next 6 years. The deposits will earn 5 percent compound annual interest. IfWalter follows through with his plan, approximately how much will be in his accountimmediately after the sixth deposit is made?

Answer 1

Answer:

  $10,202.87

Explanation:

The balance will be the sum of a 6-term geometric sequence with first term 1500 and common ratio 1.05. The sum of such a sequence is given by ...

  sn = a1(r^n -1)/(r -1)

We have a1=1500, r=1.05, n=6, so the sum is ...

  s6 = 1500(1.05^6 -1)/(1.05 -1) = 10,202.87

Walter's account balance after the 6th deposit will be $10,202.87.