What is the future value at the end of year 5 of a series of 3 deposits? The first deposit occurs at the end of year 3 and is $700. The remaining deposits increase by $140/year (so the last deposit will be $980 and will occur at the end of year 5) . Assume i = 8.8% compounded annually.

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EXPERT ANSWER

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

YearCash flow at future year
3700(1.088)^2=$828.6208
4(700+140)(1.088)=$913.92
5(700+140+140)=$980
Total=$2722.5408