Engineering Economics: How much is left in the account one year after the purchase?

Submitted by Colene Gammad on

You deposit \$1,000 into a 9% account today. At the end of two years, you will deposit another \$3,000. In five years, you plan a \$4,000 purchase. How much is left in the account one year after the purchase?

Jhun Vert Sat, 08/20/2016 - 13:41

Balance = Receipts - Disbursements
$\text{Balance} = (F_1 + F_3) - F_4$
 

econ_005-balance-after-one-year.gif

 

F = P(1 + i)n
$\text{Balance} = \Big[ 1000(1 + 0.09)^6 + 3000(1 + 0.09)^4 \Big] - 4000(1 + 0.09)$

$\text{Balance} = (1677.10 + 4234.74) - 4360$

$\text{Balance} = \$1,551.84$