………. Beginning of ………… End of ….

………. Year Amount ……. Year Amount

——————————————————–

Year 1 ….. $500 … x 1.11 = $555

** now for Year 2… you take the result at END OF Year 1 and ADD $500 …. then take that NEW result and multiply by 1.11 to get the amount of annuity at the END OF Year 2 … like this…. (look at calculation for Year 2) **

Year 2 ($555+$500) x 1.11 = $1,171.05

** and for each successive year… you take the result at END OF the PREVIOUS year and ADD $500 …. then take that NEW result and multiply by 1.11 to get the amount of annuity at the END OF the new “current” year … like this…. (look at calculation for Year 3 **

Year 3 ($1,171.05 + $500) x 1.11 = $1,854.87

** now look at the calculation for Year 4… Previous Year (Year 3) END OF year amount PLUS $500 …. then multiply that new result by 1.11 … and so on so for… for Year 5… for Year 6…. all the way to Year 25…. But remember… you have to ADD $500 first to the end of year amount of the previous year…. because the problem states that you are depositing $500 at the beginning of EVERY YEAR. You have to add $500 first…. THEN multiply the new amount by the 1.11…**

Year 4 ($1,854.87 + $500) x 1.11 = $2,613.90

Year 5 ($2,613.90 + $500) x 1.11 = $3,456.43

Year 6 ($3,456.43 + $500) x 1.11 = $4,391.64

Year 7 ($4,391.64 + $500) x 1.11 = $5,429.72

Year 8 ($5,429.72 + $500) x 1.11 = $6,581.99

Year 9 ($6,581.99 + $500) x 1.11 = $7,861.00

Year 10 ($7,861.00 + $500) x 1.11 = $9,280.72

Year 11 ($9,280.72 + $500) x 1.11 = $10,856.59

Year 12 ($10,856.59 + $500) x 1.11 = $12,605.82

Year 13 ($12,605.82 + $500) x 1.11 = $14,547.46

Year 14 ($14,547.46 + $500) x 1.11 = $16,702.68

Year 15 ($16,702.68 + $500) x 1.11 = $19,094.97

Year 16 ($19,094.97 + $500) x 1.11 = $21,750.42

Year 17 ($21,750.42 + $500) x 1.11 = $24,697.97

Year 18 ($24,697.97 + $500) x 1.11 = $27,969.74

Year 19 ($27,969.74 + $500) x 1.11 = $31,601.42

Year 20 ($31,601.42 + $500) x 1.11 = $35,632.57

Year 21 ($35,632.57 + $500) x 1.11 = $40,107.16

Year 22 ($40,107.16 + $500) x 1.11 = $45,073.94

Year 23 ($45,073.94 + $500) x 1.11 = $50,587.08

Year 24 ($50,587.08 + $500) x 1.11 = $56,706.65

Year 25 ($56,706.65 + $500) x 1.11 = $63,499.39

Hence, the amount of this annuity at the end of the 25th year is $63,499.39

Hope this helps!!!

first year 500 x .11 = 55 then add the original 500 to get 555

2nd 555 x .11 =61.05 adding principal to get 616.05

3rd 616.05 x .11= 67.77 …………………… 683.82

4th 683.82 x .11=………………………………………..759.04

continue this all the way up to year 25.