Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years?

Approach

(i) The first $100 is contributed in one years time and has to wait 4 years to mature. Write an equation describing this.

(ii) The second $100 is contributed in two years time and has to wait 3 years to mature. Write an equation describing this.

(iii) The third $100 is contributed in three years time and has to wait 2 years to mature. Write an equation describing this.

(iv) Continue with this logic and sum all the matured values expressed