Question

Suppose you invest $78 a month in an annuity that earns a 2.8% APR, compounded monthly. How much money will you have in this account after 4 years?

SOMEONE PLEASE HELP

Answer 1

3956.84

Explanation:

just took the quiz hope this helps

Answer 2

$87.23.

Explanation:

We are asked to find the amount after 4 years compounded monthly at the rate of 2.8% APR.

We will use compound interest formula to solve our given problem.

`A=P(1+(r)/(n))^nT`, where,

A = Final amount after T years,

P = Principal amount,

r = Interest rate in decimal form,

n = Number of times interest is compounded per year.

T = Time in years.

Let us convert our given rate in decimal form.

`2.8\%=(2.8)/(100)=0.028`

Upon substituting our given values in compound interest formula we will get,

`A=78(1+(0.028)/(12))^(12*4)`

`A=78(1+0.002333)^(48)`

`A=78(1.002333)^(48)`

`A=78*1.1183669447674708747`

`A=87.2326216918627282266\approx 87.23`

Therefore, we will have $87.23 in the account after 4 years.