You want to buy a new sports car 3 years from now, and you plan to save $4,200 per year, beginning one year from today. you will deposit your savings in an account that pays 5.2% interest. how much will you have just after you make the 3rd deposit, 3 years from now?
(a) $11,973
(b) $12,603
(c) $13,267
(d) $13,930
(e) $14,626

C

Explanation:

Let's view this in a time series.

Time : 0 to end of first year

The first year you save up to $4,200 and you deposit that money in an account.

Time: Beginning of the second year to end of the second year.

Your money now has paid a 5.2% interest. That means you have in your banking account now $4,200*1.052 = $4,418.4

Now you deposit another $4,200.

Total amount at the end of second year: $ 8,618.4

Time: Beginning of the third year to three years from now.

Your money now has paid a 5.2% interest on your total amount in the bank.

That means $8,618.4*1.052 = $ 9,066.55

Now you make your third deposit. Another $4,200

Total amount : $13,266.55  (closest integer $ 13,267)

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