finances

okay i got a question its work related so please if there are any accountants out there i need help. how much money will i have if i save 2000$ a year for ten years at 9% interest?

 

its kinda top priority. its due in tomorrow.

 

Economics class homework?

 

how did you guess

 

The internet is your friend..... there's gotta be online calculators that'll figure that stuff out.

I'm gonna guess.... $32,729.65

Don't use that - as I just did a search and plopped some numbers in not having any clue of what I was doing.
http://www.moneychimp.com/calculator/compound_interest_calculator.htm

 

It depends on how it's compounded (the more often it's compounded, the higher your actual return will be).
If it's not continuous, you use the formula: Total = P(1+i/n)^(nt)
P=principle
i= the decimal interest rate (in this case 0.09)
t= time in years
n = number of times the interest is compounded in a year.
^ = exponentiate

If you're only compounding once a year, n=1 and the formula becomes P(1+i)^t

Use the formula for each contribution (the first $2000 will collect interest for 10 years, the second $2000 for 9 years, ...., the tenth $2000 for 1 year):

Code:

Contribution       Formula                Total
1    $2000          2000*(1.09)^10   =   $4734.73
2    $2000          2000*(1.09)^9    =   $4343.79
3    $2000          2000*(1.09)^8    =   $3985.13
4    $2000          2000*(1.09)^7    =   $3656.08
5    $2000          2000*(1.09)^6    =   $3354.20
6    $2000          2000*(1.09)^5    =   $3077.25
7    $2000          2000*(1.09)^4    =   $2823.16
8    $2000          2000*(1.09)^3    =   $2590.06
9    $2000          2000*(1.09)^2    =   $2376.20
10   $2000          2000*(1.09)^1    =   $2180.00
------------------------------------------------
                                         $33120.60

If it's continuous compounding, you use the formula: Total = Pe^(rt) where
P= Principle
r= the decimal interest rate
t= the time in years
e=2.71828
^ = exponentiate

Do that for each contribution:

Code:

Contribution       Formula                      Total
1    $2000          2000*2.71828^(.09*10)  =   $4919.20
2    $2000          2000*2.71828^(.09*9)   =   $4495.81
3    $2000          2000*2.71828^(.09*8)   =   $4108.86
4    $2000          2000*2.71828^(.09*7)   =   $3755.22
5    $2000          2000*2.71828^(.09*6)   =   $3432.01
6    $2000          2000*2.71828^(.09*5)   =   $3136.62
7    $2000          2000*2.71828^(.09*4)   =   $2866.66
8    $2000          2000*2.71828^(.09*3)   =   $2619.93
9    $2000          2000*2.71828^(.09*2)   =   $2394.43
10   $2000          2000*2.71828^(.09*1)   =   $2188.35
------------------------------------------------------
                                               $33917.09 

For the calculator that Janster posted, enter the following numbers:
Current principle = $0
Annual addition = $2000
Years to grow = 10
Interest rate = 9
Compound Interest Times Annually (1 for annual, 12 for monthly, 365 for daily)
Make additions at "start"

 

http://www.bankrate.com/brm/rate/calc_home.asp

 

thank you so much guys. Glad tw cares