Gilberto opened a savings account for his daughter and deposited $1,000 on the day she was born....

Given Data:

• Payment amount: {eq}C = \$ 1000 {/eq}

• Rate of interest: {eq}i = 8 \% = \dfrac{8}{100} = 0.08 {/eq}

• Number of periods: {eq}n = 9 \ \text{years} {/eq}

We can find the amount by using the future value formula for ordinary Annuity:

$$\begin{align*} FV &= \dfrac{C \left[ \left( 1+ i \right)^n - 1 \right] }{i} \\[0.3cm] &= \dfrac{1000 \left[ \left( 1 + 0.08 \right)^9 - 1 \right]}{0.08} \\[0.3cm] &= \dfrac{1000 \left[ \left( 1.08 \right)^9 - 1 \right]}{0.08} \\[0.3cm] &= \dfrac{1000 \left[1.99900 - 1 \right]}{0.08} \\[0.3cm] &= \dfrac{1000 \left[0.99900 \right]}{0.08} \\[0.3cm] &= \dfrac{999}{0.08} \\[0.3cm] \therefore FV &= 12487.5 \end{align*} $$

Hence, the future value is {eq}\color{blue}{\$ 12487.5} {/eq}.