Math Problem Statement
A relative has promised to pay you $66.00 today, and he will pay you additional payments every year for the next five years. Each year he will add $67.00 to the previous payment. (So, the payment in year 1 will equal $133.00). You decide to save every dollar you are given and will invest the money in an account paying 6.00% annual interest. How much money will you have accumulated in five years? Keep in mind that you will have six total cash flows to invest.
Solution
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Math Problem Analysis
Mathematical Concepts
Compound Interest
Time Value of Money
Future Value
Formulas
Future Value (FV) = PV × (1 + r)^n
Theorems
Compound Interest Theorem
Suitable Grade Level
Grades 10-12
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