Question

alfred invest $60 a month in annuity that earns 4% ApR and is compounded monthly .what is the future value of alfreds accoint in five years​

Answer 1

Explanation:

Answer 2

$934.30

Explanation:

We have been given that Alfred invest $60 a month in annuity that earns 4% APR and is compounded monthly. We are asked to find the future value of Alfred's account after 5 years.

`FV=C_0\cdot (1+r)^n`, where,

`C_0=\text{Initial value}`,

`r=\text{APR in decimal form}`,

`n=\text{Number of times interest is compounded per year}`.

`r=4\%=(4)/(100)=0.04`

`FV=\$60\cdot (1+0.04)^(12*5)`

`FV=\$60\cdot (1.04)^(70)`

`FV=\$60\cdot 15.57161835`

`FV=\$934.2971`

`FV\approx \$934.30`

Therefore, the future value of Alfred's account in 5 years would be $934.30.