A company plans to make four annual deposits of $200,000 each to a special building fund. The funds assets will be invested in mortgage instruments expected to pay interest at 12% on the funds balance.

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Required:

Determine how much will be accumulated in the fund after four years under each of the following situations:

1) The $200,000 annual deposits are made at the end of each of the four years and interest is compounded annually.

2) The $200,000 annual deposits are made at the beginning of each of the four years and interest is compounded annually.

3) The $200,000 annual deposits are made at the beginning of each of the four years and interest is compounded quarterly.

4) The $200,000 annual deposits are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year.

1
Table, Excel, or Calc Func
Deposit
n=
i=
Fund Balance

2
Table, Excel, or Calc Func
Deposit
n=
i=
Fund Balance

3
	i=	n=	Deposit	Fund Balance
1st Deposit			200000
2nd Deposit			200000
3rd Deposit			200000
4th Deposit			200000

4
Deposit Amount	# of Payments	Interest left in Fund	Fund Balance
200000