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Your employer has agreed to place year-end deposits of $1,000,$2,000 and $3,000 into your retirement account. The $1,000 deposit will be one year from today,
Your employer has agreed to place year-end deposits of $1,000,$2,000 and $3,000 into your retirement account. The $1,000 deposit will be one year from today, the $2,000 deposit two years from today, and the $3,000 deposit three years from today. If your account earns 5% per year, how much money will you have in the account at the end of year three when the last deposit is made? Hint: There are multiple cash flows here but you have to split this problem into parts as the cash flows are not equal. You have to solve for FV for yeach CF given the years it gets to earn return and then add up the FVs. This is what your timeline looks like: Hint: How many years does $1,000 get to earn interest? Answer is not 3 years
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