01.Core Concepts

• George deposits $3,000 into an IRA each year on December 31 for three years. The account earns 10% per year. • End of • Year 1: $3,000 • Year 2: $3,000(1.10) + $3,000 = $6,300 • Year 3: $6,300(1.10) + $3,000 = $9,930 • Calculator: (END mode) PV = 0, PMT = –3,000, N = 3, I/YR = 10 • Result: FV = $9,930