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    Compound rate, deposits at beginning or end of the year

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    If the business manager deposits $200 in a savings account at the end of each year for twenty years what will be the value of her investment:

    a) At a compounded rate of 10%?

    b) At a compounded rate of 20%?

    c) What would the outcome be if the deposits were made at the beginning of each year?

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    Solution Summary

    The attached file contains an exercise which illustrates how to calculate a compound interest rate using the future value of an ordinary annuity.