First, realize what is happening. You invest $5,000 each year and make 1.5% interest. So after year one, you have $5,075. So the second year you invest an additional 5,000 plus what you already invested. The interest and principal of those combined amounts is now $10,226.12. This process continues for 18 more years. You can do it this way, or you can speed it up.
A=5,000 (what you invest every year)
i=1.5% (interest)
F=? (future value is what we want)
t=20 (years)
This problem can be solved by a Series Compound Amount formula (google this if you don't have a book with it). If your book has this equation, it probably has an appendix filled with interest tables. What you need is F/A. The factor given by the F/A column in my engineering econ book is 23.124. So 5000 (your A value)* 23.124 (F/A factor for 20yr@1.5%) gives you a final answer of $115,620
If I have 5000 to invest, each year, at 1.5% interest per year, what is the total amount invested after 20 years?
