Each year for the next 10 years, Carmen Lector will deposit $4,000 into an investment fund that pays 10% compounded annually

a. How much will Carmen have at the end of 10 years if the first of 10 deposits are made at the end of each year?
b. How much will Carmen have at the end of 10 years if the first of 10 deposits are made at the beginning of each year?

What will be an ideal response?

Answer:
a. $4,000 × 15.93742 (future value of an ordinary annuity at 10% for 10 periods) = $63,750
b. $4,000 × 17.53117 (future value of an annuity due at 10% for 10 periods) = $70,125