This is a problem involving future value of an ordinary annuity, given annual deposits and compounded interest. The formula for the future value of an ordinary annuity is:

$FV = P \times \frac{(1 + r)^n - 1}{r}$

Where:

• $P$ = annual deposit = $1000
• $r$ = annual interest rate = 7% = 0.07
• $n$ = number of years = 20

Let me calculate it for you.# Variables P = 1000 # annual deposit r = 0.07 # annual interest rate n = 20 # number of years

Future value calculation

FV = P * ((1 + r)**n - 1) / r FV40995.49232123118440995.492321231184successThe future value of the account after 20 years will be approximately $40,995.49.

Would you like further details on this calculation? Here are 5 related questions for exploration:

1. How does the future value change with different interest rates?
2. What if deposits are made monthly instead of annually?
3. How much total interest is earned over the 20 years?
4. How does the result differ if the compounding frequency changes?
5. What is the formula for future value in continuous compounding?

Tip: Increasing the deposit frequency or compounding frequency can significantly grow the account balance over time!